The banking sector saw major losses May 29 as markets worried about political uncertainty in Italy.
The country has seen renewed turbulence as its president halted the appointment of a euroskeptic to a key government post, scuttling plans from two populist parties to form a new government and setting off worries about the eurozone's stability.
U.S. stocks slid in reaction to the weekend's news, with the Dow Jones Industrial Average falling 1.58% to 24,361.45, the S&P 500 sliding 1.16% to 2,689.86 and the Nasdaq Composite Index retreating 0.50% to 7,396.59.
Bank stocks saw some of the larger drops, with the KBW Nasdaq Bank dropping 3.93% to 104.65 and the KBW Nasdaq Regional Bank losing 1.92% to 116.75. The Big Four U.S. banks all shrank, with JPMorgan Chase & Co. losing 4.26% to $105.93, Bank of America Corp. slipping 3.98% to $28.96, Citigroup Inc. decreasing 3.96% to $65.71 and Wells Fargo & Co. shedding 3.57% to $52.95.
Other major movers included: Citizens Financial Group Inc., which gave back 5.06% to $39.41; Huntington Bancshares Inc., which was off 4.37% to $14.44; Regions Financial Corp., which dropped 4.73% to $18.11; PNC Financial Services Group Inc., which lost 4.66% to $141.25; BB&T Corp., which closed down 4.32% to $52.47; SVB Financial Group, which slumped 3.90% to $306.99; and Zions Bancorp., which declined 3.73% to $54.92.
Maris Ogg, president at Tower Bridge Advisors, said investors showed "flights to quality" by pouring into the safety of U.S. Treasurys. Yields on 10-year U.S. Treasurys fell to 2.786% as of 4:37 p.m. ET, according to MarketWatch. Ogg noted that lower 10-year Treasury yields could put pressure on banks' profit margins, helping to weigh down their shares today.
They also were affected by the continued uncertainty about the Federal Reserve's plans to further tighten monetary policy, Ogg said.
"Things are starting to move in the right direction for banks, generally, and I think if there's a fear that it's going to go the other way, I think you're going to see some retrenchment in price," Ogg said.
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Market prices and index values are current as of the time of publication and are subject to change.
- Author
- Polo Rocha
- Theme
- Banking
