MI: Bank stocks plunge after implosions at Silicon Valley Bank and Silvergate Capital send 'shock waves' through the sector

MARKETS INSIDER reports:

Bank stocks were crushed on Thursday after implosions at Silicon Valley Bank and Silvergate Capital sent “shock waves” through the rest of the sector.

Mega-cap banks like JPMorgan, Bank of America, and Wells Fargo all fell more than 5%, while the regional banking sector sank by as much as 8%. The decline picked up steam throughout the trading day as shares of SVB Financial plunged as much as 62%. The KBW Bank Index fell 7.7%, its biggest decline since June 2020.

The implosion at SVB Financial happened after the company lowered its guidance, announced a $2.3 billion capital raise, and said it lost $1.8 billion as it sold off more than $20 billion worth of US Treasuries that it bought when interest rates were near record lows. The multi-pronged announcement caught investors by surprise.

“Part of the problem is Silicon Valley [Bank] had been telling investors up until a couple weeks ago that their guidance was intact. There was no reason to believe this announcement was going to hit,” Keefe, Bruyette & Woods’ head of equity trading RJ Grant told Insider on Thursday.

The full post is here.

Now read this: “Silicon Valley Bank’s liquidity crisis rocks the tech world“.

This: “SVB Financial’s attempts to raise capital failed; in talks for sale – report”

And this: “FDIC takes control of Silicon Valley Bank“.