us stocks opened lower on friday as a surge in the cost of deutsche banks creditdefault swaps hammered shares of the german lender helping to reignite bankingsector worries that have rattled markets in recent weeks on thursday the dow finished 75 points or 023 higher at 32105 after stocks pared earlier gains as bankingsector fears reemerged shares of deutsche bank ag dbkxe were down more than 10 in premarket trading after the cost of insuring the bank against a credit default jumped overnight to the highest level in four years deutsche banks 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 during its merger with credit suisse last week other bank regulators have said they will not follow suit clearly somebody thinks there are some concerns there said randy frederick managing director of trading and derivatives at charles schwab the problems facing european banks stem back to the era of negative interest rates which set banks up for large losses on their bond holdings he said the selloff in db shares weighed on banks in the us and europe as well as the broader market as bankingsector fears reemerged shares of ubs group ubs which recently agreed to buy crosstown rival credit suisse traded lower other major european lenders includingitalys unicredit spa and spains banco santander sa  also saw their shares sink the thing thats important to know about financials is there probably are banks that have problems but there are others that dont frederick told marketwatch during a phone interview people need to do some research shares of us regional lenders including first republic bank frc and rival pacwest bancorp pacw were also down financials were the secondworst performing sector on the sp 500 with only energy stocks faring worse on friday while the bankingsector drama has hammered the financial sector the outperformance of megacap technology stocks and other sectors has helped to limit losses for us stocks since the beginning of march the sp 500 is down by just 13 according to factset data investors were also paying attention to the latest batch of weekly data from the federal reserve which showed that banks slightly reduced their emergency borrowing from the fed to 1639 billion from 1647 billion in the latest week concerns about the fragility of the banking sector have been percolating following a year of aggressive centralbank interest rate hikes led by the federal reserve which have caused banks to take large losses on their bond portfolios in the weeks since californias silicon valley bank collapsed global central banks have pursued other measures to improve liquidity in the global financial system including introducing daily dollar swap line operations while the fed introduced a new emergencylending facility that would value banks eligible collateral at par the fed also signaled on wednesday that it would likely only deliver one more 25 basis point hike in 2023 after hiking its policy rate by 25 basis points to a range of 475 to 5 see also feds bullard says lower bond yields may offset some of the negative fallout from recent bank stress in us economic data on friday a report on sales of durable goods in the us released friday showed orders fell 1 in february largely because of waning demand for passenger planes and new cars treasury yields continued to decline on friday with the spread between the 2year treasury note yield and the 10year note narrowing to less than 40 basis points down from 100 basis points just a few weeks ago investors including doublelines jeffrey gundlach said this is a red alert that the us economy is headed for a recession matthew j maley chief market strategist at miller tabak  co said investors should probably be less concerned about the banks and more concerned about what a recession might do to corporate earnings dont get us wrong if were headed for another major banking crisis the markets will get hit even harder maley said in emailed commentary however even if the situation with the global banks calms down the stock market is still headed much lower see deutsche bank drops weighing on banking stocks and scholastic tumbles on disappointing results this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal