WALL Street stocks ended mostly down on yesterday as regional banks again came under pressure, struggling to shake off investor worries about the sector.

The Dow Jones Industrial Average closed 0.7% lower at 33,309.84, while the broad-based S&P 500 nudged down 0.2% to 4,130.57.

The tech-heavy Nasdaq Composite Index edged up 0.2% to 12,328.51.

The mixed showing came as shares of regional bank PacWest slumped 22.7%, after it reported seeing deposits drop around 9.5% in the week of May 5.

In a filing, it noted that media reports saying it was exploring strategic options fuelled fear among customers over the safety of their funds, adding that its total deposits declined 16.9% in the first quarter.

Several other regional lenders saw weakness as well including KeyCorp, Zions Bancorporation and Western Alliance Bancorporation.

“I think there is a legitimate fear of a hard landing,” said Hugh Johnson of Hugh Johnson Economics.

This is being spurred by concerns over regional banks, with deteriorating lending conditions, deposit outflows and a reduction of lending, he added.

Traders are also watching for progress in talks on lifting or suspending the US debt ceiling, as top policymakers head into a meeting Friday in hopes of breaking the impasse.

Further down the line, investors are looking towards the US Federal Reserve’s next moves too, as cooling economic indicators give it more room to consider a pause in further interest rate hikes.

Among individual companies, Disney shares ended 8.7% down after disappointing second-quarter results. – AFP, May 12, 2023.