US: Stocks end lower as regional banks dive again

WALL Street stocks dropped on Thursday following another brutal sell-off in regional banking shares, in the wake of four bank failures since early March.

The Dow Jones Industrial Average fell 0.9 per cent to 33,127.74.

The broad-based S&P 500 shed 0.7 per cent to 4,061.22, while the tech-rich Nasdaq Composite Index lost 0.5 per cent at 11,966.40.

Steep declines by more banks are adding to recession worries as markets continue to digest fresh interest rate hikes from central banks, analysts said.

“Financial stability concerns are not going away anytime soon,” said Oanda’s Edward Moya.

That will continue to fuel calls that the economy is headed towards a more hard-hitting recession than some are expecting, he added.

Thursday’s losses came after the European Central Bank followed the Federal Reserve in hiking interest rates a quarter-point.

Financial shares suffered across-the-board losses, but the deepest declines were in midsized regional banks whose reassurances about their financial positions fell flat.

Shares of PacWest Bancorp slumped 50.6 per cent, First Horizon plunged 33.6 per cent and Western Alliance Bancorporation dropped 38.5 per cent.

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Also hard-hit was entertainment conglomerate Paramount Global, which sank 28.4 per cent following disappointing results as it cut its dividend.

But shares of Kenvue surged 22.3 per cent in the health and beauty consumer business’ market debut, after the Johnson & Johnson spinoff raised US$3.8 billion for J&J. AFP