By STAN CHOE (AP Business Writer)

NEW YORK (AP) — Wall Street’s week of turmoil is closing with sharp drops for stocks on Friday as worries worsen about the banking industry and fears rise that it could drag the economy into a recession.

The S&P 500 was 1.3% lower in midday trading, cutting into its gain for the week. The Dow Jones Industrial Average was down 442 points, or 1.4%, at 31,803, as of 11:30 a.m. Eastern time, while the Nasdaq composite was 1.1% lower.

This week has been a whipsaw for markets around the world as worries rise following the second- and third-largest U.S. bank failures in history. Just a day earlier, markets rallied in relief after two banks on both sides of the Atlantic tapped into tens of billions of dollars of cash to bolster their finances.

But on Friday, some of the hope was washing out, and the pair were back to falling. In Switzerland, Credit Suisse shares dropped nearly 10%. On Wall Street, shares of First Republic Bank sank 26.5% and were on their way to a 69% plunge for the week.

The two banks have different sets of issues challenging them, but the overriding fear is that the banking system may be cracking under the weight of the fastest set of hikes to interest rates in decades.

Analysts have been quick to say the current chaos for banks looks nowhere near as bad as the 2007-08 financial crisis that ruined the global economy. But the troubles still feed into concerns about a recession because problems for banks could mean problems for smaller and mid-sized companies getting the loans they need to grow.

In “the biggest picture: since 1870 there have been 14 big world recessions, all driven by wars, pandemics & banking crises,” investment strategist Michael …read more

Source:: The Denver Post