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US stocks fall as bank worries linger after firms borrow $165 billion from Fed to shore up liquidity

Mar 17, 2023, 20:30 IST
Business Insider
(Photo by Scott Heins/Getty Images)
  • US stocks fell on Friday as investor concerns about the current state of the US banking industry linger.
  • Banks borrowed $165 billion from the Federal Reserve's backstop program to shore up liquidity.
  • First Republic fell 20% after it cut its dividend, and SVB Financial filed for bankruptcy in New York.
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US stocks edged lower on Friday as investors continued to worry about the current state of the US banking industry.

The Federal Reserve said late Thursday that it lent a combined $165 billion to various US banks as they took advantage of their emergency backstop policies in a bid to shore up liquidity. The Fed's balance sheet rose by nearly $300 billion over the past week, essentially giving up half the progress it has made in reducing its balance sheet over the past year.

First Republic Bank shored up liquidity via a $30 billion capital infusion from major US banks like JPMorgan, Wells Fargo, Goldman Sachs, Morgan Stanley, and Bank of America, among others. Still, the deal wasn't enough to stem the decline in First Republic Bank's stock, which fell 20% on Friday after it suspended its dividend.

Here's where US indexes stood shortly after the 9:30 a.m. ET open on Friday:

Here's what else is happening this morning:

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In commodities, bonds and crypto:

  • West Texas Intermediate crude oil fell 0.82% to $67.79 per barrel. Brent crude, oil's international benchmark, dropped 1.34% to $73.70.
  • Gold rose 1.64% to $1,954.60 per ounce.
  • The yield on the 10-year Treasury sank 11 basis points to 3.47%.
  • Bitcoin rose 3.16% to $26,651, while ether jumped 1.86% to $1,744.
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