US stocks fall as turmoil in regional banks resumes and Credit Suisse gets a lifeline

• US stocks dropped Thursday, with regional banking stocks still moving lower.
• Western Alliance Bancorp is the latest bank to receive warning about a potential credit rating downgrade.

US stocks fell Thursday, with regional bank stocks still under pressure on concerns about depositors while expectations about what route the Federal Reserve will take in interest rates next week continue to shift.

The S&P 500's gain for the year has been whittled to 1.4% after the index climbed by more than 8% last month. The index on Wednesday briefly erased its advance for 2023, with markets shaken up by a rout in bank stocks.

In the wake of the Silicon Valley Bank failure, regional bank stocks largely fell again on Thursday. Western Alliance Bancorporation was lower after Fitch Ratings said it may downgrade the lender's credit rating. First Republic fell after its credit rating was downgraded on Wednesday to junk status by S&P Global Ratings and Fitch Ratings, citing concerns that depositors will pull funds from the lender to protect uninsured money based on FDIC limits. PacWest stock lost ground, as well. Fitch on Wednesday placed the bank on a negative rating watch.

Credit Suisse shares, meanwhile, recovered after crashing in the previous session. Shares rose after the Swiss National Bank offered the lender a $54 billion loan.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Thursday:

• S&P 500: 3,868.51, down 0.6%

• Dow Jones Industrial Average: 31,646.47, down 0.72% (228.10 points)

• Nasdaq Composite: 11,373.57, down 0.53%

"While we remain cautious on stocks, we don't expect any kind of repeat of the 2008 financial crisis and we believe investors should be focused on how the Federal Reserve proceeds with its efforts to reduce inflation, which still remains high," Ryan Belanger, managing principal at wealth management firm Claro Advisors, in a Thursday note.

Thursday marks one year since the Federal Reserve embarked on its most aggressive run of rate hikes in decades. The abrupt failure of SVB after higher interest rates hammered the value of a big bond portfolio at the lender spurred traders to start pricing in a potential pause in rate hikes at the Fed's March 21-22 meeting. But those expectations appeared to be fading, with fed funds futures pricing indicating investors expect a rate hike of 25 basis points.

"The stock market is acting like a teenager right now, susceptible to short-term swings driven by whatever is immediately in front of it at the moment, whether it's banking sector uncertainty, Federal Reserve jitters and inflation worries," said Belanger. "The stock market is struggling for directional clarity right now and all signs are pointing to more volatility, as the market prices in a 2023 recession, which could be imminent."

Here's what else is happening today:

• Warren Buffett's Berkshire Hathaway spent nearly $500 million on Occidental stock in three days.
• 'Big Short' investor Steve Eisman says it'll be bad news for stocks if the Fed pauses rate on because of the banking panic.
• "Everything is fine" at Credit Suisse, says Saudi National Bank, the Swiss lender's biggest backer.

In commodities, bonds and crypto:

• West Texas Intermediate crude rose 0.2% to $67.78 per barrel. Brent crude, the international benchmark, picked up 0.3% at $73.88.
• Gold edged 0.1 to $1,932.90 per ounce.
• The 10-year Treasury yield fell basis points to 3.44%.
• Bitcoin gained 1.8% to $24,796.10.