Stocks fall as worries rise about Deutsche Bank, other banks

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Stocks are falling on Wall Street Friday as more worries about banks on both sides of the Atlantic tug markets lower.

The S&P 500 was 0.8% lower in early trading. The Dow Jones Industrial Average was down 239 points, or 0.7%, at 31,865, as of 9:42 a.m. Eastern time, while the Nasdaq composite was 0.8% lower.

Credit Suisse faced a relatively unique set of longstanding troubles. But the second- and third-largest U.S. bank failures in history earlier this month have cast a harsher spotlight across the entire banking industry. In the U.S., the hunt by investors has primarily been for banks that could face a debilitating exodus of customers, similar to what helped cause the failures of Silicon Valley Bank and Signature Bank.

Federal Reserve Chair Jerome Powell said worries about a pullback in lending were one of the reasons the Fed raised rates by only a quarter of a percentage point this week, instead of a more aggressive half point, in its campaign to battle inflation. Traders are more skeptical, though. The rising possibility of a recession has them betting heavily that the Fed will have to cut interest rates as soon as June to release some of the pressure on banks and the economy.

 

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