Nasdaq 100, Dow Jones, S&P 500: Regional Banks Plunge, Disney Slips, NASDAQ Bucks Trend

Highlights

• Dow and S&P 500 closed lower, while NASDAQ gained.
• Regional banks and Disney shares declined.
• U.S. debt ceiling standoff raises market concerns.

Overview

On Thursday, the Dow Jones Industrial Average and the S&P 500 closed lower, primarily due to negative performance from Walt Disney Co and regional banks such as PacWest. However, the NASDAQ Composite bucked the trend and ended the day with gains. The Dow Jones fell by 0.66%, closing at 33,309.51, while the S&P 500 experienced a loss of 0.17%, finishing at 4,130.62. In contrast, the NASDAQ Composite increased by 0.18%, reaching 12,328.51.

The trading volume on U.S. exchanges stood slightly below the 20-day average, with 10.05 billion shares traded. This indicates a modest decrease in market activity. Declining issues outnumbered advancers on both the New York Stock Exchange (NYSE) and NASDAQ.

PacWest Bancorp Shares Plunge

PacWest Bancorp’s shares plummeted by 22.7% as the company reported a significant decrease in its deposits and increased collateral provided to the U.S. Federal Reserve to enhance liquidity. This news raised concerns about the overall health of the regional banking industry. The KBW regional bank index closed with a 2.4% decline, highlighting the challenges faced by individual banks. This decline raises concerns about potential difficulties for investors in the regional banking industry.

Disney Shares Fall, Alphabet Rises

Walt Disney shares declined by 8.7% after the company reported a drop in total subscribers to its Disney+ service, despite meeting analysts’ earnings expectations. However, shares of Alphabet Inc, the parent company of Google, increased by 4.3% due to the unveiling of new artificial intelligence products to compete with Microsoft Corp. Microsoft shares decreased by 0.7% and had a negative impact on both the S&P 500 and the NASDAQ.

Energy Sector Slumps, Tesla Soars

The energy sector experienced a decline, influenced by falling oil prices. After Elon Musk’s Twitter announcement of a new chief executive for Twitter, Tesla Inc shares saw a significant jump in late trading. This announcement resulted in a 2.1% increase in Tesla shares.

Debt Ceiling Standoff Heightens Concerns

Investor concerns were heightened by the ongoing standoff in Washington over the U.S. debt ceiling, overshadowing the G7 finance leaders’ meeting. The debt ceiling deadline increased market volatility, with fears of a U.S. recession as central banks worked to stabilize the global economy. President Joe Biden warned that failure to raise the debt limit promptly could potentially trigger a recession in the U.S. economy, and he may cancel his planned trip to the upcoming G7 summit as a result.