A rebound in the Dow Jones Industrial Average and other major stock indexes faded Friday midday after Wall Street got some good news in the February employment report. Meanwhile, Wall Street watched another violent sell-off in SVB Financial, a technology lender based in California's Silicon Valley, before shares were halted.
Regulators shut down the bank and said the FDIC would protect insured deposits.
SVB Financial was halted in premarket trading, when the stock was down another 63% to 39.49. Reports surfaced that the bank hasn't been able to raise capital and that it's in talks to sell itself. Shares plunged 60% Thursday after SIVB announced a $2.25 billion stock sale to help cover big losses in the Treasury market. Bloomberg reported that venture capitalists, including Peter Thiel's Founders Fund, are advising startups to withdraw their money from SIVB.
Stock indexes were well off lows near 12 p.m. ET, but investors still flocked to bonds, sending the 10-year Treasury yield lower by 24 basis points to 3.68%. The Dow Jones industrials were down 0.5% and holding above 32,000.
Gainers in the S&P 500 included Newmont Mining, along with Intel and JPMorgan. JPM stock reversed nicely higher after falling 1.9% earlier today.
Nonfarm payrolls came in well above expectations, up 311,000 vs. the 223,000 consensus estimate. But there was some Federal Reserve-friendly data inside the report. The unemployment rate rose to 3.6% from 3.4%, and the labor force participation rate unexpectedly rose to 62.5%. Average hourly earnings rose 0.2%, below the 0.3% consensus.
Dow Jones Today
American Express and Goldman Sachs were midday laggards in the Dow Jones industrials, but both stocks moved off lows along with a lot of other hard-hit financial stocks.
Caterpillar underperformed in the Dow Jones index after UBS downgraded the stock to sell from neutral. The maker of construction and mining equipment reversed lower below its 50-day moving average Thursday.
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Besides Intel and JPMorgan, Travelers, Amgen and Honeywell also outperformed in the Dow Jones.
After falling below its 200-day moving average Thursday in heavy volume, the S&P 500 eased 0.4%. The index suffered its fifth distribution day since Feb. 9 on Thursday, falling nearly 1.9% in higher volume.
Several bank stocks besides SVB took heavy hits in the S&P 500, including Signature Bank and First Republic Bank. But after falling 32% intraday, Signature Bank was only down 7.5%, while FRC shaved a 60% intraday loss to around 7%.
The Nasdaq composite was down 0.6% just after 12:30 p.m. ET. Volume on the NYSE and Nasdaq was much higher compared with the same time Thursday.
Movers And Shakers
Outside of the Dow Jones, Oracle extended losses after losing support at its 50-day moving average Thursday in heavy volume. Earnings topped expectations, but revenue missed views.
Ulta Beauty, meanwhile, reversed higher after reporting a 24% rise in quarterly profit, with revenue up 18% to just over $3.2 billion. Ulta also raised its full-year earnings and revenue guidance but guided same-store sales below expectations.
Inside the MarketSmith Growth 250, Western Alliance extended losses after gapping below its 50-day line Thursday.
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
