On Wall Street, stock indices fell on Thursday as issues in American regional banks further unsettled investors, already nervous due to U.S.-China trade tensions.
The Dow Jones declined by 0.65 percent, to 45,952 points, while the S&P 500 slipped 0.63 percent, to 6,629 points, and the Nasdaq index fell 0.47 percent, to 22,562 points.
Regional bank stocks were under the most pressure yesterday.
The share price of Zions Bancorporation plummeted 13 percent after the regional bank reported a loss of $50 million in the third quarter, heightening investor concerns about hidden credit issues as banks navigate economic uncertainty amid still relatively high interest rates.
The stock of Western Alliance Bank fell more than 10 percent after it announced it had filed a fraud lawsuit against one of its clients.
As a result, the financial sector index dropped 2.75 percent.
– “The stock prices of some regional banks and financial institutions that are particularly sensitive to loans have sharply declined. The quality of loans may be deteriorating,” says Chuck Carlson, an analyst at Horizon Investment Services.
Investors were also monitoring developments between Washington and Beijing, given that trade tensions between the two largest economies in the world are continuously rising.
Last week, U.S. President Donald Trump threatened to impose 100 percent tariffs on China starting November 1, along with other measures, after China restricted the export of rare earth minerals.
– “With deepening uncertainty around trade between the U.S. and China, heightened rhetoric, and what that could mean for the economy and markets, I believe all of this contributes to market instability,” says Tom Hainlin, a strategist at U.S. Bank Wealth Management.
