Dow, S&P 500 fall with Disney; PacWest leads regional banks lower
NEW YORK – The Dow and the S&P 500 ended lower on Thursday, dragged down by Walt Disney Co as it lost subscribers, while PacWest led declines in regional banks after posting a drop in deposits.
Lifting the Nasdaq, shares of Alphabet Inc rose 4.3 percent, a day after Google rolled out more artificial intelligence products to take on competition from Microsoft Corp. Microsoft shares eased 0.7 percent and were among the biggest negative influences on the S&P 500 and Nasdaq.
PacWest Bancorp shares dropped 22.7 percent after it reported its deposits fell 9.5 percent last week and that it had posted more collateral to the U.S. Federal Reserve to boost its liquidity.
Other regional bank shares fell as well, as the news revived worries about the industry’s health following the recent collapse of three regional lenders. The KBW regional bank index ended down 2.4 percent.
“I don’t think you can say that it is a widespread issue. It is still very much bank by bank. But there’s very likely to be more consolidation and more headaches for regional bank investors,” said Oliver Pursche, senior vice president and advisor at Wealthspire Advisors in Westport, Connecticut.
Walt Disney shares slid 8.7 percent after the company reported late Wednesday quarterly earnings in line with analysts’ expectations but said total subscribers to its flagship Disney+ service dropped.
The Dow Jones Industrial Average fell 221.82 points, or 0.66 percent, to 33,309.51; the S&P 500 lost 7.02 points, or 0.17 percent, at 4,130.62;and the Nasdaq Composite added 22.07 points, or 0.18 percent, at 12,328.51.
The energy sector fell along with declines in oil prices.
Shares of Tesla Inc jumped in late trading after Elon Musk tweeted that he had found a new chief executive for Twitter. Tesla shares ended up 2.1 percent.
The U.S. Federal Deposit Insurance Corporation said around 113 of the country’s largest lenders will bear the cost of replenishing the $16 billion in coverage the agency has forked out for the crisis.
Also continuing to keep investors on edge was the standoff in Washington over raising the U.S. debt ceiling.
“As we get closer and closer to the debt ceiling deadline, you’re going to have more volatility,” Pursche said.
Volume on U.S. exchanges was 10.05 billion shares, compared with the 10.69 billion full-session average over the last 20 trading days.
Declining issues outnumbered advancers on the NYSE by a 2.27-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favored decliners.
The S&P 500 posted six new 52-week highs and 13 new lows; the Nasdaq Composite recorded 63 new highs and 214 new lows.
