U.S. stock futures lower as European bank shares slide

U.S. stock index futures fell Friday after three gains in four days for the S&P 500, with investors still focused on the fragile banking sector.

What’s happening
  • Dow Jones Industrial Average futures

    fell 233 points, or 0.5%, to 32086.

  • S&P 500 futures

    dropped 25 points, or 0.6%, to 3953.

  • Nasdaq 100 futures

    fell 48 points, or 0.4%, to 12806.

On Thursday, the Dow Jones Industrial Average

rose 75 points, or 0.23%, to 32105, the S&P 500

increased 12 points, or 0.3%, to 3949, and the Nasdaq Composite

gained 117 points, or 1.01%, to 11787.

What’s driving markets

Data released after the close on Thursday showed that banks slightly reduced their emergency borrowing from the Fed, to $163.9 billion from $164.7 billion in the latest week.

But the issue of the fragile banking sector was still in the spotlight, both in the U.S. and Europe. Deutsche Bank

shares dropped 8% while UBS
which has agreed to buy Credit Suisse, fell 6%.

Deutsche Bank’s AT1 securities — which convert into equity in the event of a failure — have dropped sharply in value after Switzerland wiped out the value of similar instruments from Credit Suisse while preserving some value in its equity. Other bank regulators have said they will not follow suit.

Concerns about the fragility of the banking sector comes after a wave of central bank interest rate hikes, but the Federal Reserve and other central bankers bet they can resume their inflation fight while using other facilities to curb bank sector stress.

The U.S. economics calendar on Friday includes durable-goods orders and flash purchasing managers index data, with St. Louis Fed President James Bullard due to speak.

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