Stocks declined Thursday, as contagion fears in the regional bank space were reignited.
The Dow Jones Industrial Average fell 286.50 points, or 0.86%, to end at 33,127.74. The S&P 500 slid 0.72%, closing at 4,061.22. The Nasdaq Composite shed 0.49%, ending the day at 11,966.40. This was the fourth consecutive day of declines for the major indexes.
The Dow turned negative for the year on Thursday, pulling back 0.06% year to date. Declines in Boeing, Disney, Goldman Sachs and American Express shares dragged on the Dow.
Shares of PacWest tanked by more than 50%. The decline came after news late Wednesday that the California bank has been assessing strategic options, including a possible sale, a person familiar told CNBC. Regional bank shares sold off hard, with the SPDR S&P Regional Bank ETF (KRE) dropping more than 5%. Western Alliance tumbled 38% and saw trading halted multiple times due to volatility. Meanwhile, Zions Bancorporation lost 12%.
Investors also digested the Federal Reserve's 25 basis point rate hike and commentary following its Wednesday meeting.
Keith Apton, managing director at UBS Wealth Management, said that the volatility in the banking sector will help the Fed's mission of cooling down the economy.
"I think it's going to take care of the Fed's job. ... Regional lenders are going to have to constrain capital. I don't think that money is going to be flowing through the system nearly as easily in the back half of this year and that indirectly is going to cool down the economy, which is ultimately going to do the Fed's job by bringing inflation down," said Apton.
"So, I do not think that the Fed will have to raise rates any further the rest of this year, although tomorrow's data on the jobs reading will be important to watch," he added.
April's nonfarm payrolls report is due Friday at 8:30 a.m. ET, as well as numbers on the unemployment rate.
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May 05, 2023 at 03:29AM
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Stocks close lower for a fourth day on renewed bank worries, Dow goes negative for 2023: Live updates - CNBC
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