Markets Sink on Fears About Banks and Weaker Economic Outlook
Stocks slumped on Tuesday, as fears about the health of the financial sector after the collapse of First Republic Bank collided with broader anxiety stemming from signs of a weakening economy.
Some regional banks, which have been under pressure since Silicon Valley Bank and Signature Bank failed in March, took sizable hits on Tuesday, shattering the relative calm that prevailed after First Republic was seized and sold to JPMorgan Chase by regulators on Monday.
PacWest’s stock lost more than 20 percent of its value, its worst single-day drop since the height of the bank turmoil in March. Western Alliance sank nearly 20 percent, while Comerica and Zions bank both suffered double-digit percentage declines.
The moves came alongside data showing U.S. manufacturers received fewer new orders than expected in March and a continued cooling of the labor market that month, with job openings falling and layoffs rising. Oil prices fell sharply, too, as the prospects of an economic downturn would likely cut energy demand. The price of a barrel of Brent crude, the international benchmark, dropped to around $76, nearly its lowest level for the year.
Source: The New York Times
