by Noel Randewich and Ankika Biswas
(Reuters) – The New York Stock Exchange ended lower on Thursday as fears over the health of U.S. regional banks reignited, weighing on the wider sector.
The Dow Jones index fell -0.86%, or 286.5 points, to 33,127.74 points.
The broader S&P-500 lost 29.53 points, or 0.72%, to 4,061.22 points.
The Nasdaq Composite fell for its part by 58.93 points (-0.49%) to 11,966.40 points.
Concerns about a banking sector crisis were reignited after California-based bank PacWest Bancorp said it was in talks with potential partners and investors about strategic options, including a sale.
The fears spread across the sector, dragging down Western Alliance Bancorp, KeyCorp, Valley National Bancorp and Zions Bancorp, with the KBW index of regional banks losing up to 7%.
“Regional banks and tighter credit conditions are weighing on the market as investors try to recalibrate the situation in terms of credit cycles and bank lending standards, and to determine when a potential recession could hit,” said Zhe Shen, Managing Director of Diversification Strategies at TIFF Investment Management.
The Vix volatility index rose 21 points to its highest level since the end of March.
Investors, who are increasingly worried about the worsening banking sector crisis and economic slowdown in the United States, mostly expect the United States Federal Reserve (Fed) to cut interest rates. here is its July meeting, according to WEC’s FedWatch.
The Fed raised its main interest rate by 25 basis points on Wednesday, as expected, and paved the way for a possible pause in its rate hike campaign.
The Labor Department also announced on Thursday that jobless claims rose more than expected in the United States during the week to April 29, a sign that the labor market is gradually easing amid high interest rates. .
In values, the big banks JP Morgan and Wells Fargo both fell.
Apple was also down ahead of its earnings release, which is expected after markets close.
Moderna, for its part, rose after posting better-than-expected revenue in the first quarter.
(With contributions from Sruthi Shankar and Caroline Mandl; Camille Raynaud)
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