Wall Street stocks were in the red early on Friday as fears over the current state of the global banking system stirred up once again.
As of 1500 GMT, the Dow Jones Industrial Average was down 0.53% at 31,933.59, while the S&P 500 slipped 0.45% to 3,930.81 and the Nasdaq Composite came out the gate 0.46% weaker at 11,732.95.
The Dow opened 171.66 points lower on Friday, erasing gains recorded in the previous session despite interest rate hikes from a number of global central banks.
Stocks headed south after Deutsche Bank’s credit default swaps jumped, a form insurance for bondholders against default, raising concerns over the health of the European banking industry just a short while after Swiss regulators forced UBS to acquire rival Credit Suisse.
Treasury Secretary Janet Yellen has already stated that regulators were will to take further action to stabilise banks stateside, if required, as she attempted to boost confidence in the US banking system following the collapse of Silicon Valley Bank and Signature Bank.
On the macro front, durable goods orders dropped 1% month-on-month in February, according to the Census Bureau, following an upwardly revised 5% fall in January and ahead of market forecasts for a print of a 0.6% increase. However, excluding transportation equipment, which was the biggest drag on durable goods orders with a 2.8% drop, excluding transportation, new orders were virtually flat.
In other data news, economic activity in the US was resurgent in March, according to S&P Global, rising at its fastest level in almost a year. The composite output index for manufacturing and services jumped from a reading of 50.1 for February to 53.3 in March. The purchasing managers’ index for services jumped from 50.6 during the previous month to 53.8, while the factory PMI jumped from 47.3 to 49.3.
Elsewhere, St Louis Federal Reserve president James Bullard said the central bank’s fiscal policy should help fix cracks in the financial system as he mirrored recent comments from Fed chairman Jerome Powell.
“Continued appropriate macroprudential policy can contain financial stress, while appropriate monetary policy can continue to put downward pressure on inflation,” said Bullard.
Reporting by Iain Gilbert at Sharecast.com
