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The Dow Jones Industrial Average fell Wednesday as investors contemplated the future of Credit Suisse, a bank with a large international and U.S. presence, and peers.
The 30-stock index was pounded 280.83 points to 31,874.57.
The S&P 500 fell 27.36 points to 3,891.93. Wednesday’s decline brought the S&P 500's year-to-date gain down to less than a percentage point.
The NASDAQ Composite fought its way into plus territory, 5.9 points, to 11,434.05.
The indexes regained some ground in afternoon trading following announcement from a Swiss regulator that the country’s central bank would give Credit Suisse liquidity if necessary. Investors were concerned earlier in the day after the Saudi National Bank, Credit Suisse’s largest investor, said Wednesday it could not provide any more funding, according to a Reuters report.
The news came after the Swiss lender said earlier this week it had found “certain material weaknesses in our internal control over financial reporting” for the years 2021 and 2022. U.S.-listed shares of Credit Suisse were last down nearly 14%, off session lows.
In recent days, a crisis in the financial sector has centered around regional banks as Silicon Valley Bank and Signature Bank collapsed, both casualties of poor management in the face of eight interest rate hikes by the Federal Reserve in the last 12 months. Attention turned to the big banks on Wednesday.
As Credit Suisse dragged down the European Bank sector, U.S. big bank shares declined in sympathy. Citigroup slid 5%, while Wells Fargo and Goldman Sachs each lost 3%. Bank of America slipped just under 1%.
Regional banks, which rebounded Tuesday to lift sentiment for the broader market, fell back into the red again, pushed down by losses of more than 20% in First Republic Bank and 10% in PacWest Bancorp.
Prices for the 10-year Treasury leaped, lowering yields to 3.47% from Tuesday’s 3.68%. Treasury prices and yields move in opposite directions.
Oil prices lost three dollars to $68.33 U.S. a barrel.
Gold prices gained $11.70 to $1,922.60 U.S. an ounce.
