NEW YORK: Wall Street stocks ended mostly down on Thursday (May 11) as regional banks again came under pressure, struggling to shake off investor worries about the sector.
“I don’t think you can say that it is a widespread issue. It is still very much bank by bank. But there’s very likely to be more consolidation and more headaches for regional bank investors,” said Oliver Pursche, senior vice president and advisor at Wealthspire Advisors in Westport, Connecticut.
The Dow Jones Industrial Average fell 221.82 points, or 0.66%, to 33,309.51; the S&P 500 lost 7.02 points, or 0.17%, at 4,130.62; and the Nasdaq Composite added 22.07 points, or 0.18%, at 12,328.51.
Lifting the Nasdaq, shares of Alphabet Inc rose 4.3%, a day after Google rolled out more artificial intelligence products to take on competition from Microsoft Corp. Microsoft shares eased 0.7% and were among the biggest negative influences on the S&P 500 and Nasdaq.
The mixed showing came as shares of regional bank PacWest slumped 22.7%, after it reported seeing deposits drop around 9.5% in the week of May 5.
In a filing, it noted that media reports saying it was exploring strategic options fueled fear among customers over the safety of their funds, adding that its total deposits declined 16.9% in the first quarter.
Several other regional lenders saw weakness as well including KeyCorp, Zions Bancorporation and Western Alliance Bancorporation.
“I think there is a legitimate fear of a hard landing,” said Hugh Johnson of Hugh Johnson Economics.
This is being spurred by concerns over regional banks, with deteriorating lending conditions, deposit outflows and a reduction of lending, he added.
Traders are also watching for progress in talks on lifting or suspending the US debt ceiling, as top policymakers head into a meeting Friday in hopes of breaking the impasse.
Further down the line, investors are looking towards the US Federal Reserve's next moves too, as cooling economic indicators give it more room to consider a pause in further interest rate hikes.
Among individual companies, Disney shares ended 8.7% down after disappointing second-quarter results. – AFP, Reuters
Source: The Sun Daily
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