NEW YORK (dpa-AFX) – On the New York stock exchanges on Friday, the latest warning signals in the banking sector no longer unsettled investors too much. The US leading index Dow Jones Industrial recently gained 0.24 percent to 46,065 points. The technology-heavy NASDAQ 100 gained 0.17 percent to 24,700 points. The market-wide S&P 500 recorded an increase of 0.10 percent to 6,636 points.
Concerns about US regional banks weighed on Wall Street on Thursday. Two institutions, Zions Bancorp (Zions Bancorporation) and Western Alliance Bancorp (Western Alliance Bancorporation), reported that they may have fallen victim to loan fraud in connection with distressed real estate funds. That raised concerns among investors that credit standards at smaller U.S. banks may be too lax overall.
Zions Bancorp and Western Alliance recovered somewhat from their previous day’s losses on Friday, trading 4.3 and 1.8 percent higher, respectively. Experts cautioned not to extrapolate the problems to the entire sector.
Other regional banks calmed things down a bit before the weekend. Truist Financial, Regions Financial and Fifth Third Bancorp reported lower provisions for loan losses than analysts expected. Ally Financial released strong numbers that showed continued demand for auto loans and somewhat alleviated concerns about lower-income consumers. The price gains for Ally amounted to 1.7 percent. Truist Financial rose 3.8 percent.
Investors in American Express were pleased with share price gains of 6.8 percent after the credit card provider raised its annual outlook. Stocks topped the Dow and headed for their record highs.
The AI rally had recently stalled on the stock markets, a week ago the trade dispute between the USA and China suddenly intensified again and then there was also the bad news from US regional banks. In this environment, investors had at times been inclined to realize book profits after AI, defense and space fantasy had caused many tech and defense stocks to rise sharply this year.
Ultimately, however, investors continue to hope for an agreement in the US-Chinese trade conflict. Statements by President Donald Trump brought some calm to the markets before the weekend. The new tariff rate on Chinese imports is “unsustainable”. This is not sustainable for the economy. However, his plan could still work, as he emphasized in a conversation with the US television channel Fox News. In the end there must be a fair agreement./ajx/he