Dow drops as banking crisis deepens
The index that tracks 30 blue-chip US stocks plummeted more than 600 points on Wednesday
US stocks opened trading on Wednesday with a steep decline as Wall Street continues to struggle with the unfolding banking turmoil.
The Dow Jones Industrial Average slid over 600 points, down 1.6%. The S&P 500 dropped 1.8%, while the tech-heavy Nasdaq was 1.5% lower.
Pressure on the troubled financial sector has risen after Swiss banking giant Credit Suisse’s largest shareholder decided not to increase funding. Shares in the Swiss lender, which has large US and global operations, plummeted almost 25% on the news.
US bank shares also fell, with Citigroup and Wells Fargo both down 5%. JPMorgan Chase shares dropped 3.6%, while Goldman Sachs and Bank of America stumbled around 4% and 3%, respectively.
Credit Suisse’s largest investor, Saudi National Bank, reportedly announced on Wednesday that it could not provide any more funding after the bank had found “material weaknesses” in its financial reporting.
The Swiss lender is currently trying to recover from a series of scandals that have shaken the confidence of investors and clients, and from billions in losses. Customer outflows in the fourth quarter totaled over 110 billion Swiss francs ($120 billion).
The bank’s share price has been sinking to record lows this week amid broader market turmoil triggered by the collapse of several US tech lenders.
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