NEW YORK: U.S. stocks finished lower on Friday, Feb. 27, as a broad selloff in financial shares weighed on major indexes and capped a choppy week for markets. The S&P 500 slipped 0.4% to 6,878.88, while the Dow Jones Industrial Average fell 1.1% to 48,977.92. The Nasdaq composite dropped 0.9% to 22,668.21. Smaller-company stocks also declined, with the Russell 2000 down 1.7%, reflecting pressure across sectors tied to credit and funding conditions.
The heaviest losses clustered in banks, brokers and asset managers, extending a late-month slide in the financial sector. The KBW Bank Index fell 4.9%, with Goldman Sachs down 7.5% and Wells Fargo and Morgan Stanley each falling about 6%. Jefferies dropped about 9% as attention focused on potential exposure to a failed U.K. mortgage lender. Shares of large alternative-asset managers and private-equity firms also moved lower, alongside several business development companies that invest in private credit.
Investor focus sharpened after Market Financial Solutions, a London-based mortgage provider specializing in property-backed loans, entered a U.K. insolvency process. Court filings tied to the administration application cited financial irregularities and mismanagement. Documents submitted in London’s High Court said creditors were concerned about potential double-pledging of collateral and warned of a possible collateral shortfall of about 930 million pounds. Court documents also listed lenders that included Barclays, Santander, Wells Fargo, Jefferies and Apollo-backed Atlas SP Partners, among others.
Private Credit Under Pressure
U.S. economic data added another crosscurrent. The Labor Department said the producer price index for final demand rose 0.5% in January after a 0.4% increase in December, and was up 2.9% over the past 12 months. Prices for final demand services rose 0.8% in January, while final demand goods fell 0.3%, with gasoline down 5.5% and energy prices down 2.7%. Treasury yields fell as investors bought government bonds, and the 10-year yield briefly dipped below 4% for the first time since November.
Developments across private-credit markets also drew scrutiny into the close. Blue Owl Capital said last week it would sell $1.4 billion of assets across three funds, return part of the proceeds to some investors and pay down debt, and it removed a quarterly withdrawal option for investors in its smallest vehicle. The firm reported managing more than $300 billion in assets as of Dec. 31. FS KKR Capital Corp., a private-credit fund managed by KKR, reported a jump in troubled loans and cut its dividend, and its shares fell about 15% in the session.
AI Moves Into The Spotlight
Artificial intelligence remained a prominent theme in corporate headlines as investors digested announcements tied to staffing and cost structures. Block said Thursday it will cut more than 4,000 jobs, nearly half its workforce, as it embeds AI tools across its operations, and its shares surged 25% in after-hours trading. The market moves followed several sessions in which companies linked to AI adoption, software exposure and financing conditions saw outsized swings. Traders also weighed how quickly AI-related changes are appearing alongside ongoing credit-market stress.
Beyond equities, oil prices rose as geopolitical tensions stayed in focus. Brent crude settled at $72.48 a barrel, up about 2% on the day, after the U.S. and Iran extended nuclear talks and markets tracked the U.S. military posture in the region. Gold climbed toward a one-month high, supported by lower Treasury yields. In currency markets, the U.S. dollar was on track for its first monthly gain since October. For the week, the Dow fell 1.3%, the Nasdaq lost 1.0%, the S&P 500 slipped 0.4% and the Russell 2000 dropped 1.2% – By Content Syndication Services.