Chicago Sun-Times

STOCKS FALL ON RENEWED BANK FEARS

- BY STAN CHOE AP Business Writer

NEW YORK — Markets shuddered Wednesday on worries about a spreading banking crisis and how badly it will hit the economy, and stocks and bond yields fell on both sides of the Atlantic.

The S&P 500 sank as much as 2.1% before ending the day with a loss of 0.7%, while markets in Europe fell more sharply as shares of Switzerlan­d’s Credit Suisse dropped to a record low.

At one point, Credit Suisse shares lost more than a quarter of their value, after the bank’s biggest shareholde­r — the Saudi National Bank — told news outlets it would not put more money into the Swiss lender, which was beset by problems long before the U.S. banks collapsed.

But Switzerlan­d’s central bank announced late Wednesday it would support Credit Suisse if needed. Credit Suisse then said early Thursday that it is taking measures to shore up its finances.

“They’ve had issues,” said Anthony Saglimbene, chief market strategist at Ameriprise. “It’s just coming at a time when there’s more uncertaint­y and there’s less confidence in the banking system.”

Wall Street’s harsh spotlight has intensifie­d across the banking industry recently on worries about what may crack next following the collapse of Silicon Valley Bank and Signature Bank, the secondand third-largest bank failures in U.S. history. Stocks of U.S. banks tumbled again Wednesday after a rally on Tuesday.

Many analysts are quick to say the current weakness for banks looks nowhere near as bad as the 2008 crisis that torpedoed the global economy. But fears are neverthele­ss rising about a downturn.

“When you have worries about contagion and a financial crisis, there is increasing risk of a global recession,” Saglimbene said, pointing to the first drop in the price of oil below $70 per barrel since late 2021. A weaker economy would burn less fuel.

“The regional banks are so important to small businesses, midsized businesses” by providing loans, he said. “They’re a centerpiec­e of the economy.”

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