US STOCKS-Wall St falls as retail sales data fans rate fears, big banks drop

PacWest Bancorp

15/08/2023 17:23

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        * 
      July retail sales rise more than expected
    

        * 
      Nvidia gains as UBS, Wells Fargo raise PT
    

        * 
      U.S. big banks fall as a report warns of downgrades
    

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      Indexes down: Dow 0.73%, S&P 0.67%, Nasdaq 0.52%
    

  
 (Updated at 1204 pm ET/ 1604 GMT)
    By Amruta Khandekar and Shristi  Achar A
       Aug 15 (Reuters) - Wall Street's main indexes fell on
Tuesday after stronger-than-expected retail sales data stoked
worries interest rates could stay higher for longer, while U.S.
big banks dropped on a report that Fitch could downgrade some
lenders.
    The Commerce Department's report showed retail sales grew
0.7% last month against expectations of a 0.4% rise, suggesting
the U.S. economy remains strong.
   While traders' bets of a pause on hikes by the Federal
Reserve next month stayed intact at 89% after the data, analysts
said investors were worried that rates could stay at current
levels for longer than previously anticipated.
    Also weighing on markets, JPMorgan Chase  JPM.N , Bank of
America  BAC.N  and Wells Fargo  WFC.N  dropped between 1.8% and
2.4% after a report said ratings agency Fitch could downgrade
multiple banks. 
  "The story from Fitch about potential downgrades to multiple
U.S. banks (is) weighing on sentiment," said Michael James,
managing director of equity trading at Wedbush Securities.
    "You combine that with the retail sales figures this morning
that we're a little hotter than estimates, (it) furthers the
potential higher for longer rates scenario from the Fed." 
    Shares of regional lenders PacWest Bancorp  PACW.O , Zions
Bancorporation  ZION.O  and Western Alliance Bank  WAL.N  fell
between 3% and 6.3% after the Federal Deposit Insurance Corp's
latest regulatory overhaul proposal.
   The S&P 500 banking index  .SPXBK  hit a one-month low, last
down 2.2%, while the KBW regional banking index  .KRX  slipped
2.2%.
    
    The yield on the 10-year benchmark Treasury note  US10YT=RR 
briefly climbed to a near 10-month before edging lower.  US/ 
    Rising Treasury yields have kept equities under pressure
after hotter-than-expected producer prices data last week fueled
fears the Fed could keep rates higher for longer.
    All major 11 S&P 500 sectors declined, with energy stocks
 .SPNY  leading losses on weaker crude prices.  O/R  
    Technology stocks  .SPLRCT  fared better, thanks to a 2.2%
rise in shares of Nvidia  NVDA.O  after UBS and Wells Fargo
lifted their price targets on the stock. 
    Nvidia had posted its biggest one-day percentage gain since
late May in the previous session following bullish comments from
Morgan Stanley, with analysts also saying investors were piling
into the stock in the run-up to its earnings next week.
    U.S.-listed shares of Chinese companies JD.Com  JD.O ,
Alibaba Group  BABA.N  and Bilibili  BILI.O  slid between 2.2%
and 4.6% after another round of disappointing economic data from
China which prompted Beijing to cut key policy rates.  
    At 12:04 p.m. ET, the Dow Jones Industrial Average  .DJI 
was down 256.98 points, or 0.73%, at 35,050.65, the S&P 500
 .SPX  was down 30.25 points, or 0.67%, at 4,459.47, and the
Nasdaq Composite  .IXIC  was down 71.07 points, or 0.52%, at
13,717.26.  
    Among other stocks, General Motors  GM.N  fell 1.7% after
Berkshire Hathaway  BRKa.N  cut its stake in the automaker.
    Warren Buffett's Berkshire disclosed a new investment in
homebuilder D.R. Horton  DHI.N  and Lennar Corp  LEN.N , lifting
their shares up 2.3% and 1.6%, respectively. 
    Declining issues outnumbered advancers by a 3.87-to-1 ratio
on the NYSE and a 2.15-to-1 ratio on the Nasdaq.
    The S&P index recorded three new 52-week highs and 15 new
lows, while the Nasdaq recorded 35 new highs and 142 new lows.
 
  
    
  
    
  
    
  


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U.S. Retail sales in July    https://tmsnrt.rs/448SB5I
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 (Reporting by Amruta Khandekar, Shristi Achar A and Shashwat
Chauhan; Editing by Maju Samuel and Vinay Dwivedi)
 ((Amruta.Khandekar@thomsonreuters.com;
Shristi.AcharA@thomsonreuters.com;))