Shares of PacWest (NASDAQ: PACW) fell more than 60% on Thursday morning as the stock market opened lower amid fresh sell-off for regional banks.
The PAWC stock had been halted following massive volatility and traded to lows of $11.35 as uncertainty in the US banking system reigned supreme.
US regional banks tank amid sector uncertainty
The sell-off for the PacWest bank was also mirrored across several other regional banks, with the rot having hit a new level after the collapse of Silicon Valley Bank. As Invezz highlighted here, it was only a matter of time before more banks bled following the collapse of First Republic Bank.
Western Alliance (NYSE: WAL) dumped nearly 60% after news emerged the bank was weighing up a potential sale. Shares of First Horizon National (NYSE: FHN) and Zions (NYSE: ZION) were down 38% and 17% respectively as the latest negative reports around regional banks hit investor sentiment like a sledgehammer to the head. For First Horizon, the declines come after its $134 billion deal with TD Bank collapsed.
Other bank shares in the red include Comerica at -13% and First Republic Bank, which sparked this latest stress period for the sector, which was down 9%.
The sell-off comes after the US Federal Reserve’s latest interest rate hike of 25 basis points, with the range now to 5.00%-5.25%. While Fed Chair Jerome Powell hinted at a rate pause, banks are likely to continue hitting new stress levels after more than trillion dollars are reported to have been taken out of the US regional banking system.