Shares of banks and other financial institutions fell as fears about the stability of regional banks lingered.
Shares of Beverly Hills lender PacWest Bancorp fell by 10%, continuing a volatile streak amid fears it would be the latest in a series of institutions to succumb to bank runs. Executives from some of the banks that failed earlier in the crisis, including Silicon Valley Bank and Signature Bank, faced scathing criticism from senators during a hearing. Wall Street investors are debating the outlook for other regional banks.
"Recent declines seem overdone as quarter-to-date deposit outflows are tracking in-line with seasonality," said analysts at brokerage Morgan Stanley, in a note to clients. Even factoring in conservative earnings outlooks, regional bank stocks look cheap, the analysts said.
"This sets the stage for a rebound over the next few months, especially if deposit trends are better than feared," said the analysts.
Wells Fargo settled a shareholder lawsuit stemming from seven-year old allegations it created fake customer accounts scandal with a payment of $1 billion.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
05-16-23 1722ET
