Stocks were falling Friday on continued worries about banks and rising interest rates. Deutsche Bank AG was leading shares of European lenders lower. Deutsche Bank AG stock tumbled 13% following a spike in credit default swaps, raising concerns again over the health of the European banking industry.
Deutsche Bank AG fell 6% in U.S. trading after its shares took a hit following recent troubles at fellow European banking giant Credit Suisse Group AG ADR. The price of Deutsche Bank AG’s credit default swaps rose to a four-year high on Thursday. American depositary receipts of Credit Suisse Group AG ADR were down 5.5%.
UBS Group AG bought Credit Suisse Group AG ADR for about $3 billion, slid 3.3% after receiving a downgrade to Hold from Buy by analysts at Jefferies. Shares of U.S. banks fell as investors worried about the global banking system. First Republic Bank fell 3%, while Western Alliance Bancorp, Zions Bancorporation NA, and Fifth Third Bancorp all lost more than 2%.
Large banks were not immune from traders’ skittishness.
JPMorgan Chase & Co and Bank of America Corp were down 2% as well. Activision Blizzard Inc rose 6.9% after the U.K.’s Competition and Markets Authority said it no longer had concerns that Microsoft would use its $68.7 billion deal for the video game maker to snag Call of Duty from competitors like Sony. Activision Blizzard Inc was the top performer in the S&P 500 Index.
Block Inc slid 1.9%, a day after losing nearly 15% when short-seller Hindenburg Research alleged that Block facilitates fraud. On Friday, Block Inc was downgraded to hold by Atlantic Equities on the lack of clarity on its Cash App after Hindenburg’s short position. Block Inc was down 3.4%.
Shares of Block Inc closed almost 15% lower on Thursday after being targeted by short-selling firm Hindenburg Research. The firm alleged that Block Inc has inflated user metrics and has not reined in improper activity on its platform. Block Inc called the report “factually inaccurate” and “misleading”, and announced plans to explore legal action against Hindenburg.
Investors put more pressure onto shares of Coinbase Global Inc early Friday.
Coinbase Global Inc stock ticked down 2.3% in premarket trading, a day after the company disclosed it received a “Wells Notice” from the Securities and Exchange Commission, which warned the agency could take enforcement action against the crypto exchange. The disclosure pushed Coinbase Global Inc stock down more than 14% on Thursday. Year to date, Coinbase Global Inc stock is still up 87% this year.
Coinbase Global Inc stock was downgraded Friday to Underperform from Market Perform with a $36 price target by analysts at TD Cowen. Energy names fell in in the premarket as oil prices slid, with investors worried about potential oversupply. Marathon Oil Corp and Devon Energy Corp fell about 3%.
Halliburton Co, Occidental Petroleum Corp, Diamondback Energy Inc, and Exxon Mobil Corp each lost about 2%. Incyte Corp saw its shares fall more than 3% after it issued a regulatory update on its ruxolitinib extended-release tablets. The FDA has said it can not approve Incyte Corp’s application in its present form.
Shares of Scholastic Corp fell 13% after the company reported a decline in revenue for its fiscal third quarter from the previous year and lowered its financial guidance for the full year.
Scholastic Corp now projects about 4% revenue growth for the year, compared to its previous outlook of between 8% and 10%. Scholastic Corp stock fell 19.6%. Torrid Holdings Inc gained 22.7% after fourth-quarter sales topped estimates and the plus-sized retailer’s fourth-quarter loss narrowed.
Lidar maker Ouster Inc Cl A reported fourth-quarter sales that missed estimates and the stock fell 9.3%. Ouster Inc. Cl A expects fiscal first-quarter sales to range between $15 million to $17 million, lower than Wall Street estimates of $20 million. But Ouster Inc. Cl A just closed its merger with Velodyne on 1 Feb and remains on track to top previously projected annualised cost savings of $75 million within nine months.