US stocks fall in early trading after European banks plunge
Signage is displayed outside of a First Republic Bank branch in Santa Monica, California on March 20, 2023. Photo by Patrick T. Fallon / AFP
- By Agence France-Presse (AFP)
- March 24, 2023 9:00 PM
New York, United States - US stocks opened lower on Friday as Wall Street responded to a dramatic fall in European banking shares, amid ongoing contagion concerns over the sector.
Ten minutes into trading, the Dow Jones Industrial Average and broad-based S&P 500 indexes were trading down around 0.6 percent at 31,916.51 and 3,923.94 respectively.
The tech-heavy Nasdaq Composite Index was down around 0.7 percent at 11,709.81.
In Europe, shares of German banking giant Deutsche Bank were down more than 10 percent shortly after trading began on Wall Street, after a spike in its cost of default cover.
Shares of Deutsche Bank's peer Commerzbank were down more than seven percent, while Paris-based Societe General's share price had fallen 6.7 percent.
"Deutsche Bank has hit the headlines. And this just feeds into the overall concern about the health of the banking system," said LPL Financial chief global strategist Quincy Krosby.
"It's sell first, ask questions later. That's a flight into safety," she said.
She added that investors "don't want to wake up on Sunday night, finding out that Deutsche Bank has deteriorated further, the way the Credit Suisse issues unfolded over the course of a weekend."
US regional banks, which have been under stress since Silicon Valley Bank collapsed earlier this month, were also down in early trading, with First Republic Bank shares tumbling another four percent.
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