Stocks sank on Wall Street on Thursday as worries about the US banking system intensified:
- The Dow fell 286 points, or 0.8%, to 33,127.
- The S&P 500 fell 29 points, or 0.7%, to 4,061.
- The Nasdaq fell 58 points, or 0.4%, to 11,966.
- The fourth straight day of declines means the Dow is now negative for 2023, notes CNBC.
The wildest action was in the financial industry, where shares of PacWest Bancorp tumbled 47.7%, per the AP. The bank been under heavy scrutiny by investors recently following three of the four largest US bank failures in history. “The important thing to remember is banking is as much about confidence as it is about economics and accounting,” said George Bory, chief investment strategist for fixed income at Allspring Global Investments. “We’re in a period where confidence is very fragile, arguably damaged. Policy makers are trying to reestablish confidence in the system, and you can just see what’s happening in share prices: The confidence hasn’t been restored yet.”
First Horizon, meanwhile, dropped 32.4% after it and TD Bank Group agreed to call off their merger deal. TD told First Horizon it did not know when it could get regulatory approvals for the deal. Helping to support stocks despite all the worries has been a largely better-than-feared earnings reporting season. Companies in the S&P 500 are still on track to report a second straight quarter of profit drops, but the results have mostly been better than expected. Ball gained 13.7% after the maker of aluminum cans and other packaging reporting stronger profit than expected. Kenvue, the consumer health business spun off by Johnson & Johnson, soared nearly 21% in its first trading following its initial public offering. Its brands include Band-Aids, Listerine, and Tylenol.
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