Wall Street ends down on more regional bank concerns
STORY: U.S. stocks ended lower Thursday as investors remained concerned about regional banks.
PacWest Bancorp tumbled after it confirmed it was exploring strategic options including a sale. While Western Alliance Bancorp plummeted and denied it was considering a sale.
The Dow dropped nearly nine-tenths of one percent, the S&P 500 slipped seven-tenths of one percent and the Nasdaq finished down half of one percent.
Large banks also lost ground including JP Morgan Chase which agreed to buy the majority of the assets of First Republic Bank this week after regulators seized it, marking the largest U.S. bank failure since the 2008 financial crisis.
Large regional bank stocks fell too which Zenith Wealth Management Founder and Investment Director Jason Ray sees as a potential opportunity.
“I think when you look at the regional banking sector, like if you look at the iShares regional banks and yes, it's down almost 34% year to date. When we look at the top holdings in that ETF, PNC, U.S. Bank Corp, Truist, M&T Bank, Fifth Third, all these companies have strong balance sheets."
I think they've been competitive In a higher interest, rising interest rate environment with their depositors offering CD's and other products to take advantage of a higher interest rate environment. [FLASH] "I think it's an element of our finance. We had financials exposure anyway. I think that would increase the risk profile of that exposure, but it's something we're definitely considering for our clients."
While investors are increasingly worried about a widening banking crisis and an economic downturn, the Federal Reserve remains focused on inflation. It raised interest rates Wednesday by a quarter point, while Chair Jerome Powell said that it was too soon to say with certainty that the rate-hike cycle was over.
Other stocks on the move included Paramount Global which plunged 28-percent after missing revenue estimates and slashing its dividend.