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Wall Street Deepened Losses and PacWest Crash Rekindled Banking Crisis

Wall Street Deepened Losses and PacWest Crash Rekindled Banking Crisis

Wall Street closed lower on Thursday after a PacWest decision deepened fears about the health of US lenders, weighing on shares of midsize banks and other major financial institutions.

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Wall Street fell dragged by bank shares before fears of an expansion of the crisis unleashed in March. According to preliminary data, the S&P 500 0.7%, at 4,060.76 units; while the Nasdaq Composite lost 0.5%, to 11,963.94 units. The Dow Jones Industrial Average fell 0.9% to 33,122.06 units.

Shares of PacWest Bancorp sank to a record low after confirming that it is exploring strategic options, including a sale.after shares of the regional lender and its peers were hurt by fears of a worsening banking crisis.

Western Alliance Bancorp shares tumbled and trading was halted several times. At its session low, Western Alliance shares fell more than 60% and the lender denied a report that it was exploring a potential sale.

Regulators seized First Republic Bank and JPMorgan Chase agreed to buy most of its assets earlier this week, marking the biggest U.S. bank failure since the 2008 financial crisis.

Shares of KeyCorp, Valley National Bancorp and Zions Bancorp also fell. The KBW regional banking index fell as much as 7%.

Canada’s Toronto-Dominion Bank Group canceled its $13.4 billion acquisition of First Horizon Corp, sending shares of the US bank plunging sharply.

“Mid-scale banks and tighter credit conditions weigh on the market as investors try to recalibrate where we are in terms of credit cycles and bank lending standards, and when a recession might hit,” said Zhe Shen, managing director of diversification strategies in TIFF Investment Management.

Source: Ambito

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