Despot issues at SVB Financial resulted in asset sales at a big loss.
JUNG YEON-JE/AFP/ Getty Images
Small things can lead to big reactions, and that seems to be the case with bank stocks on Thursday, as a huge loss at
Financial (ticker: SIVB) has caused stocks like
Bank of America
(WFC) to get pummeled.
Here’s what’s happening. Silicon Valley Bank’s parent, SVB Financial, said Wednesday night that it had sold securities from its portfolio for a $1.8 billion loss, while also announcing plans to raise capital via an offering of common and preferred stock. SVB Financial stock has tumbled 62% to $119.35 on Thursday, its largest drop ever.
The selling didn’t stop there. The entire banking sector has gotten hammered with the
SPDR S&P Bank ETF
(KBE) off 7.2% and the
SPDR S&P Regional Banking ETF
(KRE) down 7.9%. No one has been immune.
JPMorgan stock has fallen 5.5%, while Bank of America has dropped 6.3%, and Wells Fargo has declined 6.2%. “There is a run on banks today with some of the majors getting hit hard,” writes NatAlliance Securities’ Andrew Brenner.
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