Regional bank stocks bounced back on Wednesday after plunging on Tuesday.
Concerns about the health of banks are lingering after First Republic’s assets were snapped up by JPMorgan Chase over the weekend. Another Federal Reserve interest-rate increase, which may be delivered Wednesday, as well as the prospect of recession, have clouded the outlook.
Commercial property loans, in which some regional banks specialize, may be a particular worry.
Berkshire Hathaway
Vice Chairman Charlie Munger said earlier this week that banks are full of bad loans and there are tough times to come as property prices fall.
On Wednesday, shares of Beverly Hills-based
PacWest Bancorp
(ticker: PACW) rose 8.1% after closing down 28% at $6.50 on Tuesday.
Western Alliance Bancorp
(WAL) advanced 4.3% after a 15% drop.
Comerica
(CMA) gained 1.9% after sliding 12% on Tuesday. The stocks had all fallen in the premarket.
“Worries have ratcheted up again that a maelstrom of problems are lurking within regional banks and that there could be another breakage as interest rates are set to be hiked again,” said Susannah Streeter, head of money and markets at
Hargreaves Lansdown.
“There was hardly a pause for breath after the
JPMorgan
takeover of
First Republic Bank.
”
Write to Brian Swint at [email protected]
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