Why Bank Stock Investors Are Still Scared
Stock market investors had to deal with an unexpected problem late last week, as quick and largely unforeseen bank failures echoed the systemic challenges that resulted in the financial crisis in 2008 and 2009. Major market benchmarks fell sharply, and bank stocks in particular plunged on uncertainty about which financial institutions might be the next to buckle.
Stock index futures initially rose Monday morning on news that the federal government would step in to ensure that depositors in key regional banks SVB Financial and Signature Bank, which both recently closed, got payment in full. However, as the open of regular trading approached, those gains turned into losses, and in the case of the Dow Jones Industrial Average (DJINDICES: ^DJI), it resulted in a 1% decline. Those moves reflect confusion among shareholders in financial institutions about what the potential impact will be across the sector.
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Source Fool.com
