:max_bytes(150000):strip_icc()/GettyImages-2221730261-fb4b604cac3242d799e0361f49e91379.jpg "Regional Banks Slump on Worries About Bad Loans; Data Storage Stocks Surge")
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Key Takeaways
- Regional bank stocks lost ground after a pair of banks disclosed issues with bad and fraudulent loans, while data storage stocks gained in the wake of price-target hikes from analysts.
- Fifth Third Bancorp and Regions Financial were among the S&P 500’s biggest decliners after Zions Bancorporation warned of a multimillion-dollar charge-off to cover bad loans and Western Alliance said it was dealing with a fraudulent borrower.
- Micron Technology, Western Digital, and Seagate Technology powered higher after Wall Street analysts highlighted strong AI-driven demand for memory and data storage.
Reports of elevated loan losses from regional banks weighed on the sector, while expectations of AI-driven growth helped lift shares of companies in the data storage and memory chip businesses.
Major U.S. equities indexes finished lower after a volatile session as U.S.-China trade tensions remained in focus and investors digested a slew of earnings reports. The Nasdaq slipped 0.5%, the S&P 500 fell 0.6%, and the Dow dropped 0.7%. See here for more reporting from Investopedia on the day’s market moves.
Fifth Third Bancorp (FITB) and Regions Financial (RF) were among the S&P 500’s biggest decliners, with both stocks sliding close to 6% after Zions Bancorporation (ZION) said it was taking a $50 million third-quarter charge-off to cover a pair of bad loans, and Western Alliance (WAL) said it was dealing with a fraudulent borrower. Western Alliance shares fell close to 11% and Zions plunged 13%.
Kenvue (KVUE) shares also sank about 13%. A lawsuit filed this week in the United Kingdom claimed that the consumer health company’s baby powder caused cancer and other diseases. Kenvue completed its spin-off in August 2023 from Johnson & Johnson (JNJ), which has been ordered to pay $966 million in damages after a jury in the U.S. found the company liable for similar claims.
Shares of cybersecurity firm F5 (FFIV) plummeted nearly 11%. The provider of application delivery and security services said Wednesday that it had been the target of a major cyberattack, which it attributed to a nation-state actor.
The S&P 500’s top performance Thursday came from shares of J.B. Hunt Transport Services (JBHT), which motored 22% higher after the logistics company topped third-quarter sales and profit estimates. Improvements in efficiency and network balance helped drive growth in the company’s intermodal business, which combines rail and truck services.
Micron Technology (MU) shares climbed close to 6% after a pair of price-target hikes from analysts at Citi and UBS, saying they expect the memory chipmaker to benefit from supply shortages in the face of booming AI demand.
Western Digital (WDC) and Seagate Technology (STX) also surged, adding roughly 5% and 3%, respectively, after Wedbush raised its targets for the stocks, suggesting data storage supply could be tight for years, supporting higher prices and margins for the hard drive makers.
