On Monday, a slew of US stock indices in the Wall St. had rounded off the session in an ambivalent complexion with benchmark S&P 500 wrapping up slightly in the reds, as deep-pocket lenders took a tattering header after Japan’s Nomura and Credit Suisse had warned of billions of dollars in losses following an investment fund’s default on margin calls, though optimisms of a solid economic recovery lurking over the horizon, had stymied the losses.
In point of fact, in the day’s Wall St. was almost entirely hinged on concerns related to a hedge fund’s default on margin call, which usually occurs when a firm runs low on funds mostly due to trading-associated losses, as a greater New York City-based investment fund, Archegos Capital, went default earlier in the day, spooking investors on which lenders might be in crosshairs apart from Credit Suisse and Nomura.
Following the warnings from Credit Suisse and Nomura that Archegos Capital, which went default on margin calls, could result in billions of dollars in claims and liabilities, shares’ prices of large US lenders fell sharply with KBW Nasdaq banking stock index tumbling as much as 2.3 per cent after having been bottomed to a session low of 3.5 per cent, however, Dow managed to eke out gains with Boeing Co.
leading the charge, as the grief-sickened planemaker had reached an accord with a budget US carrier Southwest Airlines Co. for a prototype of its best-selling 737 Max jetliners.
Wall St. closes mixed as Archegos’ default weigh on banking shares
Citing statistics, although the impacts of Archegos’ default had yet to be felt as cited by a number of Wall St.
analysts, benchmark S&P 500 shed lost 0.09 per cent to 3,971.09 and tech-heavy Nasdaq was nudged 0.60 per cent lower to 13,059.65, while trade-sensitive Dow added 0.3 per cent to 33,171.37. Meanwhile, addressing to a growing market uncertainty on US lenders’ exposure to Archegos Capital’s default, a chief market strategist at Prudential Financial in Newark, New Jersey, Quincy Krosby said in the day’s Wall St.
closing bell, “There’s still chatter as to whether or not, and which, American banks may be affected. That is a question that’s lurking. But so far the market has taken (the news) in stride essentially. ”