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Thursday's Bank Stocks: Retail sector, North Korea tensions drag markets


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Thursday's Bank Stocks: Retail sector, North Korea tensions drag markets

U.S. bank stocks, along with the broader markets, sank Thursday, Aug. 10, dragged by the retail sector and heightened tensions between the U.S. and North Korea.

The SNL U.S. Bank Index fell 2.05% to 542.53 and the SNL U.S. Thrift Index lost 1.19% to 876.21. The Dow Jones Industrial Average slipped 0.93% to 21,844.01, the Nasdaq Composite Index decreased 2.13% to 6,216.87 and the S&P 500 dipped 1.45% to 2,438.21.

"It has been a risk-off for the last two days," Kevin Nicholson, chief market strategist at RiverFront Investment Group, said. "The vast majority of it is due to North Korea. Basically what you're seeing is a uniform selloff globally. As the escalation between the U.S. and North Korea goes, folks are starting to take a more defensive stance in their portfolios."

Nicholson said the retail sector, which has been under pressure for some time now, remains a concern.

"I think folks were hoping that you were going to get some better-than-expected earnings out of those retail companies that reported today," he said. "Obviously you didn't, and it's put more pressure on the market."

The "big four" banks were also down for the day, as JPMorgan Chase & Co. slid 1.43% to $92.19, Bank of America Corp. declined 2.51% to $24.12 and Citigroup Inc. fell 1.77% to $67.22.

Wells Fargo & Co. decreased 1.59% to $51.95, amid reports that Stephen Sanger is likely to step down as chairman before the company's annual meeting in spring 2018. The company, under fire for another scandal, has Capitol Hill legislators calling for the removal of its board.

Among notable movers, SVB Financial Group fell 3.75% to $172.82, Texas Capital Bancshares Inc. lost 3.91% to $74.90, Cadence Bancorp. declined 4.36% to $20.86, Prosperity Bancshares Inc. plunged 4.11% to $62.02 and Western Alliance Bancorp. dropped 4.37% to $47.90.

In the thrift space, Flagstar Bancorp Inc. slid 1.75% to $31.37, Provident Financial Services Inc. lost 1.43% to $24.83 and New York Community Bancorp Inc. declined 1.91% to $12.31.

In economic news, the U.S. Department of Labor reported that initial claims for unemployment benefits increased by 3,000 to a seasonally adjusted 244,000 for the week ended Aug. 5. The four-week moving average was 241,000, 1,000 lower than the previous week's revised average of 242,000, which was revised upward by 250.

"From the economic data, it was really nothing to torpedo the market," Nicholson added. "It's really the geopolitical headlines that have caused the volatility spike that we've seen."

Market prices and index values are current as of the time of publication and are subject to change.