Bank carnage drags stocks lower as SVB Financial shares plunge

A brutal day across the banking sector took a toll on the broader market Thursday, with major indexes posting sharp losses after SVB Financial’s sale of a large chunk of its portfolio at a loss sparked selling.

SVB SIVB shares fell as much as 62% during the session, leading to a round of selling across the financial sector. The KBW Bank Index BKX dropped more than 7% for its biggest daily loss since 2020, while major Wall Street banks also felt the heat. Shares of JPMorgan Chase & Co. JPM fell more than 5% to lead decliners in the Dow Jones Industrial Average DJIA .

Alon Rosin, head of equity derivatives at Oppenheimer, said “contagion” in regional bank stocks was “clearly the driver of overall weakness today.” On Wednesday, SVB Financial Group sold $21 billion in securities for a loss of $1.8 billion. SVB is the holding company for Silicon Valley Bank of Santa Clara, Calif. It had $212 billion in assets as of Dec. 31.

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