China data backtrack in USD 21 trillion bond market sparks relief and concern

SHANGHAI, March 17 (Reuters) – Two days of chaos in China’s USD 21 trillion bond market ended on Friday after Beijing allowed money brokers to resume providing data to third-party platforms, bringing relief for traders but also raising questions over the regulators’ stance on data.

The abrupt u-turn saw brokers’ real-time bond price data reappear on most financial information platforms on Friday, including Wind and Dealing Matrix, traders told Reuters.

Regulators had on Wednesday barred the brokers from providing data feeds, citing data security. Turnover in the interbank bond market tumbled 9% on Wednesday and another 16% on Thursday as traders had trouble accessing price information with many turning to QQ and WeChat messaging groups to trade.

“I felt like I was blind,” said one trader. “I had no idea whether the market was rising or falling.”

The episode and lack of explanation risks further undermining business confidence in China at a time when many companies are trying to understand and adapt to Beijing’s tightening oversight over areas from finance to technology, analysts said.

China has in recent years grown more concerned over data security and rolled out new laws and compliance requirements for firms. Earlier this month it announced it would form a new national data bureau but has yet to give further clarity on how it will work.

“Already in the past year, and in particular the past few months there’s been quite a bit of confusion about the compliance requirements in terms of data security, and more than a little bit of trepidation about what they might mean for business,” said Tom Nunlist, a data policy analyst at research firm Trivium China.

“Until we see a more detailed explanation of what happened here, this increases the sense of compliance unpredictability,” he said.

DRIVEN CRAZY

The China Banking and Insurance Regulatory Commission (CBIRC), which regulates money brokers, has not responded to requests for comment on the data feed ban or its reversal.

The u-turn came after China’s central bank and the CBIRC summoned money brokers and some banks on Thursday afternoon to discuss the policy impact, financial news magazine Caixin reported on Friday.

“Can you imagine how happy I am after experiencing such deep sorrow?” said a bond trader, adding that the feed cut had driven her crazy looking for alternative sources of price information.

The ban was lifted for most money brokers, including the joint ventures of NEX International Ltd, BGC Partners (BGCP), Central Tanshi and Compagnie Financiere Tradition (CFT).

Popular platform qeubee, owned by Ningbo Sumscope Information Technology Co and money broker Tullett Prebon SITICO (China) Ltd, which supplies bond price data to Sumscope, remained subject to the data feed block. It was not immediately clear why.

The policy reversal suggests the industry-wide ban on data feeds was ill-conceived, traders said, while one bond fund manager criticized how the ban created fresh problems in the market, but the government didn’t offer any solution.

Some traders and analysts drew a parallel to a previous policy reversal in 2016, when China suspended its newly introduced stock market circuit breaker after the mechanism sparked sharp falls in share prices.

(Reporting by Brenda Goh and Winni Zhou; Additional reporting by Jason Xue and Samuel Shen; Editing by Muralikumar Anantharaman, Edwina Gibbs, Tom Hogue and Simon Cameron-Moore)

Wall Street closes higher as First Republic helps lift banks

NEW YORK, March 16 (Reuters) – A strong rebound by financials helped Wall Street’s main indexes close firmly positive on Thursday, after some of the country’s largest lenders came to the rescue of embattled First Republic Bank.

The technology sector also contributed to the gains, helping to boost the Nasdaq Composite to its strongest performance since Feb. 2, 2022.

The latest twist in the US regional banks saga came on the heels of a 50-basis point rate hike by the European Central Bank, which earlier in the day had dampened investor sentiment already hurt by fears of a banking crisis.

Financial institutions, including JP Morgan Chase & Co JPM.N and Morgan Stanley (MS), confirmed earlier reports they would deposit up to USD 30 billion into First Republic Bank’s coffers to stabilize the lender.

“Banks are looking out for one another,” said Huntington Private Bank chief investment officer, John Augustine.

“We had two outliers go down and now they want to save what is considered a more mainstream bank.”

Shares of JP Morgan and Morgan Stanley were up 1.94% and 1.89% respectively, while the lifeline buoyed First Republic Bank (FRC), which gained 9.98%.

The positive sentiment spread to other regional lenders, with Alliance Bancorp (WAL) and PacWest Bancorp (PACW) advancing 14.09% and 0.7%, respectively, following a negative start.

The KBW regional banking index gained 3.26%, while the S&P 500 banking index advanced 2.16%, as both sub-indexes reversed losses.

Concerns about banks have rattled the stock market in recent days after the collapse of SVB Financial fueled contagion fears.

Meanwhile, US Treasury Secretary Janet Yellen said the US banking system remains sound and Americans can feel confident that their deposits will be there when needed.

US-listed shares of Credit Suisse (CS) advanced after the bank secured a credit line of up to USD 54 billion from the Swiss National Bank to shore up liquidity and investor confidence.

The Dow Jones Industrial Average rose 371.98 points, or 1.17%, to 32,246.55, the S&P 500 .SPX gained 68.35 points, or 1.76%, to 3,960.28 and the Nasdaq Composite added 283.23 points, or 2.48%, to 11,717.28.

Data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week, pointing to continued labor market strength, which could persuade the Fed to keep raising rates further.

Weak retail sales figures, as well as data showing a downward trend in producer inflation, on Wednesday had bolstered bets of a small rate hike by the Federal Reserve at its meet concluding on March 22.

Money markets are still largely pricing in a 25-basis-point rate hike by the Fed at its March 22 policy announcement.

Facebook parent Meta Platforms (META) and Snapchat operator Snap Inc (SNAP) climbed 3.63% and 7.25%, after the US administration threatened to impose a ban on rival TikTok.

Advancing issues outnumbered declining ones on the NYSE by a 2.80-to-1 ratio; on Nasdaq, a 1.95-to-1 ratio favored advancers.

The S&P 500 posted 4 new 52-week highs and 22 new lows; the Nasdaq Composite recorded 38 new highs and 235 new lows.

(Reporting by David Carnevali)

Gold prices hold firm as banking worries persist

March 16 (Reuters) – Gold prices edged higher on Thursday, bouncing towards last session’s 1-1/2-month peak as concerns about the banking crisis continue after the European Central Bank hiked interest rates despite the ongoing financial stability risks.

Spot gold was up 0.1% at USD 1,919.31 per ounce by 01:53 p.m. EDT (1753 GMT), after jumping to its highest since early February at USD 1,937.28 on Wednesday.

US gold futures settled 0.4% lower to USD 1,923 per ounce.

Ignoring financial market chaos and calls by investors to dial back policy tightening at least until markets stabilise, the European Central Bank raised interest rates by 50 basis points on Thursday.

“The ECB did surprise the market with a 50-basis point (bp) hike, it is a little unsettling because the reason banks are in trouble is because of rates rising too fast,” said Jim Wycoff, senior analyst at Kitco Metals.

“We are seeing continued safe-haven demand for gold with elevated anxiety in the marketplace over this banking crisis.”

Investors’ focus will now shift to next week’s US Federal Reserve policy meeting, with markets largely expecting the US central bank to raise rates by 25 bps.

While bullion is considered a hedge against economic uncertainties, higher rates increase the opportunity cost of holding the non-yielding asset.

Helping bullion further were losses in broader financial markets as shares, bonds and dollar fell.

The near-term outlook for gold looks bullish, but if the Fed decides to rate hikes by 50 bps next week, then it will pressure bullion, said Daniel Pavilonis, senior market strategist at RJO Futures.

Meanwhile, the number of Americans filing new claims for unemployment benefits fell more than expected last week, pointing to continued labor market strength.

Spot silver slipped 0.7% to USD 21.62 per ounce, platinum gained 1.2% to USD 973.53 while palladium dipped 1.2% to USD 1,430.44.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Jane Merriman and Krishna Chandra Eluri)

Investors shun high-yield bonds on recession, banking risks

March 16 (Reuters) – Global investors have resumed their selling of high-yield corporate bonds after a brief respite in January, as fears over the health of smaller banks add to risk aversion driven by worries over rising interest rates, recession, and defaults.

Concerns have been heightened by the wild swings in market interest rates since the collapse of Silicon Valley Bank SIVB.O last week.

Fund managers advise shunning high-yield bonds, despite their attractive yields, because of the risk these bonds could be hit by ratings downgrades, defaults, and a squeeze in company earnings.

“Market concerns are elevated, given the uncertainty of a recession this year, the path of inflation, and most recently, the collapse of Silicon Valley Bank,” said Jim Smigiel, chief investment officer (CIO) at investment firm SEI.

“Given the volatility of the past few days and the still unfolding situation within financials, the turmoil in the banking sector could certainly increase outflows and further test the system.”

The demand for high-yield bonds has faltered since February due to a rise in US Treasury yields, as strong economic activity bolstered expectations that inflation would remain sticky, and the Federal Reserve would have to raise interest rates more to contain it.

Refinitiv Lipper data showed high-yield bond funds, after seeing an inflow of USD 7.63 billion in January, faced an outflow of USD 11.51 billion in February.

So far this month, high-yield bond exchange-traded funds (ETFs) have seen a total outflow of USD 506 million.

However, safer money market funds have attracted USD 28.76 billion, and government bond funds have seen an inflow of USD 15.52 billion since February.

The ICE BofA Global high-yield bond index has fallen over 3% since the start of February, making the yields attractive at 8.7%.

The yield spread between the BofA high-yield bond index, and the US 10-year Treasury bond has risen to more than 500 basis points for the first time since October.

Still, the spread is tighter than the 2,090 basis points during the 2008 financial crisis and about 1,000 basis points in 2020 when the coronavirus crisis hit.

“Investors should look to reduce exposure to the US high yield market at this time because we expect there will be a better entry level in the near future,” said David Norris, head of US Credit at TwentyFour Asset Management.

“Once we can be sure that the Fed has reached or is close to reaching the terminal rate, with the potential for a soft to softish landing, investors at that point could begin to increase exposure to high yield.”

“In the meantime, investors should stay invested but move up the credit spectrum to higher-rated bonds in more defensive sectors, keeping a lower duration profile.”

DEFAULT RISKS RISE

According to Fitch Ratings, the trailing 12-month US high-yield default rate stood at 1.6% in February, the highest since June 2020. The credit rating agency also says default rates are poised to rise toward the historical average of 3.6%.

Deutsche Bank predicts higher risks of defaults this year in European high-yield corporate debt as they are increasingly vulnerable to the slowing global economy.

“There’s a huge wall of debt that is going to be maturing in 2024 to 2026 that is going to be resetting at much higher interest rates than where it is fixed today,” said Christopher Zook, CIO of CAZ Investments.

“And so there’s a lot of concern that there’s going to be a very significant increase in borrowing costs for these companies that are going to have to refinance in 2024-2026.”

(Reporting By Patturaja Murugaboopathy and Gaurav Dogra in Bengaluru;Additional reporting by Davide Barbuscia in New York; Editing by Vidya Ranganathan and Mark Potter)

UK debt agency treads careful path to sell near-record volume of bonds

LONDON, March 15 (Reuters) – Britain is trying to limit the burden on bond dealers as it prepares to sell the highest volume of government debt since the COVID-19 pandemic against a backdrop of turbulent markets, the head of the UK Debt Management Office (DMO) said on Wednesday.

After finance minister Jeremy Hunt announced his budget plans earlier on Wednesday, the DMO said it would need to sell 241.1 billion pounds (USD 291 billion) of government bonds in the 2023/24 financial year – the highest on record apart from 485.8 billion pounds sold in 2020/21.

In some ways, the challenge now is even tougher. The Bank of England is no longer a buyer in the market, and instead is reducing its own gilt holdings by 80 billion pounds a year.

And recent days have seen some of the biggest daily price swings in decades in fixed income markets, as investors reset their interest rate expectations following the collapse of Silicon Valley Bank and concerns about Credit Suisse.

“Global financial markets are pretty stressed and volatile. Some of the movements that have occurred over the last week in fixed income markets have been huge,” DMO chief executive Robert Stheeman told Reuters.

Britain experienced its own bond market turmoil in late September and October, when an adverse reaction to then Prime Minister Liz Truss’s plans for unfunded tax cuts forced the Bank of England to intervene.

“The big difference now is that these movements are not UK-driven,” Stheeman said.

Britain has seen strong investor demand at most of its bond auctions, although a handful of auctions have had to accept slightly low bids to sell the full volume of debt on offer.

A very large amount of money

The DMO now wants to ensure that its primary dealers – a group of 17 major financial institutions which have the right to take part in British government debt auctions – are not overburdened by the amount of debt they need to bid for and sell on to customers.

“Behind the scenes, we’re very focused on the duration risk and spreading that out, and make sure that supply doesn’t unnecessarily weigh on the balance sheet capacity and the intermediation capacity of our primary dealers,” Stheeman said.

“We do what we can, while obviously needing to raise a very large amount of money.”

In practice, that can mean a skew towards short-dated bonds with a maturity of under seven years, although British government debt continues to have the longest maturity of any major economy.

“We can issue larger cash amounts in, for instance, a short-dated auction than in a long- or index-linked auction,” Stheeman said.

Over the coming year, the DMO aims to sell 86.7 billion pounds of short-dated bonds, 65.3 billion pounds of medium-dated, 50.1 billion pounds of long-dated gilts and 26.2 billion pounds of inflation-linked debt.

The medium- and long-dated debt includes 10 billion pounds of ‘green’ bonds – a volume that is capped by the requirement for the government to designate investment projects which meet certain environmental criteria.

The DMO has also had to develop a working relationship with the Bank of England, which now has its own separate bond auction programme. The two organisations have agreed not to hold auctions on the same day as each other, but there can now be as many as four separate British government bond sales in a week.

“This is a process that’s been going on now for a couple of months, and which so far has worked quite well,” Stheeman said. “It does mean of course that the calendar looks very crowded from the perspective of the street.”

(Reporting by David Milliken; Editing by Kirsten Donovan)

Oil snaps declining streak as Saudi, Russia meeting calms markets

BENGALURU, March 16 (Reuters) – Oil prices settled 1% higher on Thursday, ending a three-session losing streak, after reports that Saudi Arabia and Russia met to discuss ways to enhance market stability.

Brent crude futures rose USD 1.37, or 1%, to settle at USD 74.70 a barrel, while the West Texas Intermediate crude futures (WTI) gained 74 cents, or 1.1%, to settle at USD 68.35 a barrel.

Saudi state media reported that the country’s energy minister Prince Abdulaziz bin Salman and Russian deputy prime minister Alexander Novak met in the Saudi capital to discuss the OPEC+ group’s efforts to maintain market balance.

Both countries remain committed to OPEC+’s decision last October to cut production targets by two million barrels per day until the end of 2023, the reports stated.

“That news woke up the bulls in the market, and it was kind of expected with the sell-off that we have seen over the past few sessions,” said John Kilduff, partner at Again Capital.

Earlier in Thursday’s session both contracts had dropped by more than USD 1 a barrel to near 15-month lows. On Wednesday, US crude fell below USD 70 a barrel for the first time since Dec. 20, 2021.

Oil prices were also supported by a broader recovery in financial markets after Credit Suisse (CSGN) was thrown a lifeline by Swiss regulators, and US Treasury Secretary Janet Yellen assured lawmakers that the US banking system remains sound.

The dollar weakened on Thursday, making greenback-denominated oil cheaper for holders of foreign currencies, and boosting demand.

Both OPEC and the International Energy Agency (IEA) have this week forecast stronger oil demand, but oversupply concerns continue to weigh on the market.

The IEA said commercial oil stocks in developed OECD countries had hit an 18-month high while Russian oil output in February stayed near levels registered before the war in Ukraine, despite sanctions on its seaborne exports.

“Market sentiment remains fragile as investors continue to weigh up the latest developments in the banking sector both in the US and in Europe,” said Fiona Cincotta, Senior Financial Markets Analyst at City Index.

The European Central Bank’s decision to hike interest rates, as expected, also weighed on oil prices.

Oil trading will continue to be volatile, especially if other central banks persevere with rate hikes, said Craig Erlam, analyst at OANDA.

“Authorities may have thrown their support behind the banking sector while managing the collapse of the mid-tier institutions in the US but traders are far from convinced that the worst is behind us,” Erlam said.

(Reporting by Shariq Khan; Additional reporting by Ahmad Ghaddar, Muyu Xu; Editing by Elaine Hardcastle, David Gregorio and Susan Fenton)

China interbank bond turnover drops 9% after data block

SHANGHAI, March 16 (Reuters) – Turnover in China’s $18 trillion interbank bond market shrank 9% on Wednesday from the previous session, the latest official data showed, as a regulatory ban on money brokers’ data feed business slowed trading.

The full brunt of the data restrictions, which took effect on Wednesday, would be felt after market close on Thursday, because turnover of some bonds is reported on the second day of trading.

Chinese money brokers cut data feeds to vendors that provide real-time price quotes on Wednesday after a ban from regulators, sending participants in the world’s second-biggest bond market scrambling for workarounds as Beijing tightens its grip on data.

Cash bond trading in China’s interbank market totalled 1.28 trillion yuan ($185.39 billion) on Wednesday, down 9% from 1.4 trillion yuan on Tuesday, according to data from the National Interbank Funding Center.

China’s interbank market accounts for about 87% of China’s $21 trillion bond market, which also includes debt instruments traded on stock exchanges.

Chinese money brokers, which include the joint ventures of Tullett Prebon, NEX International Ltd, BGC Partners, Central Tanshi and Compagnie Financiere Tradition, were told to suspend their data feed by regulators, sources said on Wednesday.

Regulators cited data security concerns, and the fact that money brokers are not licensed to supply data to third-party vendors, the sources said.

Neither the money brokers nor their regulator, the China Banking and Insurance Regulatory Commission (CBIRC), have responded to requests for comment.

Chinese bond traders have heavily relied on financial terminals including qeubee, Wind and Dealing Matrix for real-time price quotes, so the sudden data ban sent traders scrambling to join QQ or WeChat messaging groups for price information.

The data feed ban would make trading less efficient, and could impact turnover, traders and data vendors have said.

($1 = 6.9042 Chinese yuan renminbi)

(Reporting by Li Gu and Brenda Goh; Additional reporting by Samuel Shen; Editing by Jamie Freed)

((samuel.shen@thomsonreuters.com; +86 21 20830018; Reuters Messaging: samuel.shen.thomsonreuters.com@reuters.net))

Gold stalls as traders strap in for more banking news

March 16 (Reuters) – Safe-haven gold paused its rally on Thursday as traders positioned for more developments surrounding the banking sector crisis after Credit Suisse became the latest focal point.

Spot gold ticked 0.1% lower to USD 1,916.89 per ounce, as of 0648 GMT, after jumping more than 1% to USD 1,937.28 on Wednesday. US gold futures shed 0.5% to USD 1,922.00.

Slowing some of the selloff in equity markets, Credit Suisse Group AG said on Thursday it intended to borrow up to 50 billion francs (USD 54 billion) from the Swiss National Bank to boost its liquidity after the flagship Swiss lender’s shares slumped on Wednesday.

While investors are looking for a safe asset to park money after the banking crisis, triggering gold’s recent rallies, they’re now awaiting fresh cues, said Hareesh V, head of commodity research at Geojit Financial Services, terming the slight pullback on Thursday a technical correction.

Overall, gold was also buoyed by softness in the rival safe-haven dollar, making bullion cheaper for overseas buyers.

“Longer-term, gold’s strong average performance in the lead-up to and following both initial Fed rate cuts and US recessions keeps us biased for higher prices as macro uncertainty swirls,” JP Morgan analysts said in a note, forecasting gold to top USD 2,000/oz this year.

Bullion is considered a hedge against economic uncertainties, although higher rates increase the opportunity cost of holding the non-yielding asset.

Markets are now pricing a 68.9% chance for a 25 basis-point hike at the US Federal Reserve’s March meeting.

Goldman Sachs raised its probability of the US economy entering a recession in the next 12 months to 35% amid the small bank stress.

Spot silver slipped 0.4% to USD 21.69 per ounce, platinum was 0.1% lower at USD 961.27, while palladium lost 0.5% at USD 1,455.03.

(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips and Eileen Soreng)

Classic safe havens the winners as crisis goes global

There’s no doubting it now – Credit Suisse has made the banking crisis global and, in classic financial crisis mode, investors are rushing for the global safe havens of the US dollar, US Treasuries and Japanese yen.

There are major economic data releases from Asia on Thursday – New Zealand GDP, Japanese trade, Australian unemployment, and an Indonesian rate decision – but all that will be subsumed by the ferocious volatility sweeping through world markets.

Indeed, the most important driver for Asian markets on Thursday may come from Frankfurt. The European Central Bank (ECB) was on track to raise rates by 50 basis points, but can it be so aggressive – can it tighten at all – in light of Wednesday’s tumultuous events?

A cynic might point out that the ECB has form for failing to grasp the enormity of an unfolding financial crisis and raising interest rates. Not once, but twice.

Asian markets are likely to open under severe pressure on Thursday, even though Wall Street closed off its lows – the Nasdaq even ended up slightly – after the Swiss National Bank said it would provide Credit Suisse (CSGN) liquidity “if necessary.”

Even if a full resolution for Credit Suisse is announced and markets surge in a relief rally on Thursday, financial crises are not resolved in a few days. Remember, Bear Stearns was rescued in March 2008, oil rose to a record high and the ECB raised rates that July, and Lehman wasn’t until September.

Debate is intensifying on the roots of the banking crisis – solvency, liquidity, or asset quality? – regulatory blind spots, the US and Swiss response so far, what more regulators need to do, and the impact on growth and monetary policy going forward.

But ultimately, the banking system and markets rely on confidence. If that goes – and it can disappear very quickly – it can take a long time to recover.

Amid so much uncertainty, investors won’t stray too far from the safety of the dollar, Treasuries and the yen, and the top-rated collateral of US bills. The aforementioned Asian economic indicators could offer brief distraction, but it will likely be just that – brief.

Here are three key developments that could provide more direction to markets on Thursday:

– ECB policy meeting

– Indonesia interest rate decision

– Japan trade (February)

(By Jamie McGeever; editing by Josie Kao)

Wall Street down as Credit Suisse sparks fresh bank selloff

NEW YORK, March 15 (Reuters) – US stocks pared losses late on Wednesday, but the Dow and S&P 500 still closed lower, as problems at Credit Suisse revived fears of a banking crisis, eclipsing bets on a smaller US rate hike this month.

Benchmark indexes regained some ground in late trade after Bloomberg reported the Swiss government was holding talks on options to stabilize the country’s banking giant. The Nasdaq composite closed with slight gains.

“We are seeing movement on the headlines but not severe headlines which is good. … I don’t think we are at 2008-2009 stages by any means when it comes to the contagion stuff,” said Themis Trading co-manager of trading, Joe Saluzzi.

Still, Credit Suisse troubles piled more pressure on the banking sector after US authorities relieved investors with emergency measures to prevent contagion after the collapse of SVB Financial SIVB.O and Signature Bank (SBNY).

Some investors believe aggressive US interest rate hikes by the Federal Reserve caused cracks in the financial system.

“They’ve tightened at the steepest, most dramatic rate that we’ve seen since 1980 and so I think this could be the opportunity for them to pause,” said Cresset Capital CIO, Jack Ablin.

US-listed shares of Credit Suisse (CS) hit a record low, after its largest investor said it could not provide more financing to the bank, starting a rout in European lenders and pressuring US banks as well.

The selloff put an early end to Wall Street’s lukewarm rebound in yesterday’s session.

“The bounce back yesterday in financial stocks, the banks, made sense, but sort of an overriding factor here is a loss of confidence and it’s really fear of the unknown,” said Adams Funds CEO and senior portfolio manager Mark Stoeckle.

Data showed US retail sales fell 0.4% last month after 3.2% growth in January. Economists polled by Reuters had expected a contraction of 0.3%.

A separate report showed US producer prices unexpectedly fell in February, a day after another reading showed moderation in consumer inflation. This fueled investor hopes the Fed might slow its rate hikes.

US Treasury yields fell, with traders now expecting equal chances of a 25-basis-point rate hike and a pause at the Fed’s March meeting.

The Dow Jones Industrial Average fell 280.83 points, or 0.87%, to 31,874.57, the S&P 500 lost 27.36 points, or 0.70%, to 3,891.93 and the Nasdaq Composite added 5.90 points, or 0.05%, to 11,434.05.

First Republic Bank (FRC) tumbled 21.37% while PacWest Bancorp (PACW) slid 12.87%, and trading was halted several times for volatility, a day after shares of the battered banks staged a strong recovery.

Shares of Western Alliance Bancorp (WAL) and bank and brokerage Charles Schwab Corp (SCHW) bucked the trend to close up 8.3% and 5%, respectively. Both stocks reversed early declines.

“In the financial markets, you just have to look at the ones that could weather through and don’t have as much investment risk on their on their portfolio,” said Jeffrey Carbone, managing partner at Cornerstone Wealth.

Big US banks including JPMorgan Chase & Co (JPM), Citigroup (C) and Bank of America Corp (BAC) dropped, pushing the S&P 500 banking index down 3.62%. The KBW regional banking index declined 1.57%.

Most of the 11 major S&P 500 sectors were in the red, with energy the worst performer with a 5.42% fall.

Declining issues outnumbered advancing ones on the NYSE by a 3.34-to-1 ratio; on Nasdaq, a 2.33-to-1 ratio favored decliners.

The S&P 500 posted 3 new 52-week highs and 37 new lows; the Nasdaq Composite recorded 17 new highs and 379 new lows.

(Reporting by David Carnevali; Editing by David Gregorio)

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