Stocks Fall as Banks Warn of Losses

U.S. stocks edged lower Monday, pressured by declines in bank shares.

The Dow Jones Industrial Average inched down 36 points, or 0.1%. The S&P 500 declined 0.4%, retreating from a record Friday, and the Nasdaq Composite fell 0.7%.

Financial stocks led declines after a large investment fund last week unwound billions of dollars in holdings, triggering concern that global banks that dealt with the firm could face sharp losses.

Credit Suisse Group and Nomura Holdings said Monday that they could incur substantial losses from dealings with a U.S. client. Neither bank named its respective client. Shares in some global banks fell as investors grew worried that more financial intermediaries may struggle to recoup money lent to this client.

A large trader late last week swiftly unwound holdings in a handful of companies including ViacomCBS and Discovery, leading to their stocks plummeting. The move was by former Tiger Asia manager Bill Hwang’s Archegos Capital Management, which sold $30 billion in holdings, according to people familiar with the matter.