Bank Stock Are Spiraling Lower Today: What's Going On?
Several bank stocks are facing significant selling pressure Tuesday on the heels of the First Republic Bank (NYSE:FRC) collapse.
Some of the bank names moving lower include Western Alliance Bancorp (NYSE:WAL), PacWest Bancorp (NASDAQ:PACW), Comerica Inc (NYSE:CMA), U.S. Bancorp (NYSE:USB) and Bank Of America Corp (NYSE:BAC).
What Happened: Following the collapse of SVB Financial Group and Signature Bank, several banks experienced elevated net deposit outflows and First Republic was impacted the most.
The regional bank pulled several levers in an attempt to instill confidence for depositors, but ultimately JPMorgan Chase & Co (NYSE:JPM) acquired a substantial majority of assets and assumed deposits and other liabilities of First Republic from the FDIC after winning an auction over the weekend.
The acquisition is expected to benefit JPMorgan as it further advances the bank's wealth strategy and complements JPM overall. However, lingering uncertainty about broader contagion in the banking system persists.
See Also: 'Great Deal For JPMorgan': Bank Analysts Weigh In On First Republic Acquisition
First Republic’s unraveling marked the largest bank failure since the 2008 financial crisis. Broader concerns around the banking sector, combined with uncertainty surrounding the Federal Reserve's upcoming decision on rates is causing a selloff in markets, led by financials.
Broader Price Action: The SPDR S&P Regional Banking ETF (NYSE:KRE) was last down more than 6%. The Dow Jones had given up more than 1.15% and the SPDR S&P 500 (NYSE:SPY) was down nearly 1.1% at the time of writing, per Benzinga Pro.
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Photo: Arek Socha from Pixabay.