Stock Market Today: Stocks Sink Ahead of February Jobs Report

Stocks opened higher Thursday after data from the Labor Department showed that weekly jobless claims rose last week. Earlier this week, Federal Reserve Chair Jerome Powell warned that the central bank is prepared to issue more rate hikes should economic data continue to come in strong. 

But the enthusiasm was short-lived, with the major benchmarks turning lower in afternoon trading as investors reduced risk ahead of tomorrow's highly anticipated February jobs report. 

Taking a quick look at today's economic data shows initial claims for unemployment benefits jumped by 21,000 to 211,000 last week, the most since the week ending Dec. 24. The four-week moving average rose to 197,000 from 193,000 in the week prior, its highest level since late January.

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Next up is the monthly jobs report, slated for release ahead of tomorrow's open. Jan Hatzius, chief economist and head of research at Goldman Sachs, believes the U.S. added an above-consensus 250,000 new jobs in February. "Job growth tends to remain strong in February when the labor market is tight – we believe because some firms front-load spring hiring in anticipation of spring labor shortages – and all four Big Data employment indicators we track were indeed strong in the month," Hatzius says. 

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The financial sector was the biggest decliner today, shedding 4.1% after several bank stocks suffered significant losses. Shares of Silvergate Capital (SI) slumped 42.0% after the California-based financial firm said it is shutting down operations and liquidating assets at its subsidiary, Silvergate Bank. The lender, which offered a real-time payments system that cryptocurrency clients could use for quick currency transactions, could not escape the chaos enveloping the digital asset space – in particular the collapse of crypto exchange FTX.

However, SVB Financial Group (SIVB) had an even worse day than Silvergate stock, shedding more than 60% of its value. Last night, the financial services company said it will take a $2 billion charge due to the sale of Treasuries and other assets. SIVB also said it will sell around $1.25 billion of common stock and $500 million of depositary shares. In reaction, Moody's downgraded the credit rating for both SVB and its subsidiary, Silicon Valley Bank, due to "a deterioration in the bank's funding, liquidity and profitability."

As for the major indexes, the Dow Jones Industrial Average fell 1.7% to 32,254, the S&P 500 gave back 1.9% to 3,918, and the Nasdaq Composite shed 2.1% to 11,338.

The best stocks to sell or avoid

As we've said many times in this space, investing is a marathon, not a sprint. This is often why we look at the best stocks to buy or the best ETFs to buy from all corners of the market, because they provide investors with solid long-term opportunities. For instance, we recently updated our list of the best mid-cap stocks to buy, given they are considered the "sweet spot" of investing due to their ability to provide both stability and growth potential. And for income investors, we continually update this list of the Dividend Aristocrats – the 67 best dividend stocks for income growth.

But it's also good to take the pulse on positions that could be worth removing from your portfolio. Maybe a stock has a history of underperforming or the company is running up against a tough business environment. Whatever the reason, there are times when it's just better to cut a stock loose. One place to find red flags is by looking at analyst ratings. Sell recommendations are rare on Wall Street, but these are the top five stocks to sell or avoid right now, according to the pros.