Dusseldorf, New York Ongoing concerns about the US banking sector weighed on Wall Street sentiment on Thursday. The leading US index Dow Jones lost 0.9 percent to 33,127 points. The tech-heavy Nasdaq fell 0.5 percent to 11,966 points and the broad S&P 500 fell 0.7 percent to 4,061 points.
Regional banks were again under pressure. A media report about a possible sale of Western Alliance sent the share plummeting despite a denial from the bank. Prior to that, the focus had been on rival PacWest, which is looking at strategic options in talks with investors. “The continued downtrend in regional banks will pose a problem for the market as a whole,” said David Russell of online broker TradeStation. The Fed’s firm stance gives the short sellers “a license to kill the banks – especially the regional banks.”
The Fed hiked rates again on Wednesday, pushing them above the 5 percent mark, but is now heading for a pause. Fed Chair Jerome Powell dampened expectations of an imminent key rate cut.
US regional banks caught in crossfire again
The papers of the Western Alliance were suspended from trading several times on Thursday, losing more than 60 percent at the top and leveling off at around 40 percent. Western Alliance is considering selling the entire money house or parts of the institute, the Financial Times reported, citing insiders. However, the bank said it is not considering a sale, nor has it hired a consultant to review strategic options.
PacWest shares fell about 50 percent to $3.17. Competitors like Zion, Comerica, KeyCorp and Valley National also lost in their wake. First Horizon plummeted 33 percent after Canada’s Toronto-Dominion Bank Group abandoned plans to buy the institution.
Worries about the global banking system encouraged investors to invest in gold, which is considered a “safe haven” in times of crisis. The metal rose 0.6 percent to $2,050 a troy ounce. Miners like Newmont, Gold Field and Anglogold Ashanti were also in demand, increasing between four and five percent.
Meanwhile, the European Central Bank’s decision to take its foot off the gas a bit on its rate hike course to fight inflation supported the oil price. The North Sea variety Brent advanced slightly to $72.39 per barrel (159 liters). On the other hand, falling interest rate expectations weighed on the euro. The common currency lost 0.4 percent to $ 1.101.
Look at other individual values:
Paramount and Walt Disney: The papers fell by 28 percent after the TV and film group performed worse than the market expected in the first quarter. Walt Disney lost 3.8 percent in their wake. With the streaming service Paramount+, the group gained significantly fewer subscribers than in the previous quarter.
Qualcomm: The quarterly figures fell short of analysts’ expectations. The shares of the semiconductor group fell by 5.5 percent.
Shopify: The e-commerce platform reported better-than-expected quarterly results and also announced the sale of parts of its fulfillment business and logistics division. The share gained 23.87 percent.
Financial expert Saurenz on interest rate policy: “The drop in the stock markets is currently high”
Peloton: The fitness equipment maker’s stock slipped 13.48 percent. The company reported an unexpectedly high quarterly loss.
Shake Shack: The stock rose 16.5 percent. The company had reported a lower-than-expected quarterly loss. Turnover and sales in restaurants also exceeded forecasts.
tripadvisor: The company’s adjusted quarterly profit fell short of analysts’ forecasts, despite the online travel site operator reporting better-than-expected earnings. The stock slipped 8.6 percent.
SolarEdge: The paper climbed 6.6 percent. The solar products maker reported better-than-expected results and sales. The company explained that the problems in the supply chain had gradually improved.
Arconic: The paper rose by 28.25 percent. The Industrial parts maker has agreed to be acquired by private equity firm Apollo Global for $30 a share in cash.
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