NEW YORK—Stocks sank on Wall Street Thursday as worries cranked higher about a cracking U.S. banking system.
The S&P 500 fell 0.7 percent to add to its loss for the week so far. The Dow Jones Industrial Average dropped 286 points, or 0.9 percent, and is now down for the year, while the Nasdaq composite fell 0.5 percent.
The wildest action was in the financial industry, where shares of PacWest Bancorp tumbled 50.6 percent. It’s been under heavy scrutiny by investors recently following three of the four largest U.S. bank failures in history.
“The important thing to remember is banking is as much about confidence as it is about economics and accounting,” said George Bory, chief investment strategist for fixed income at Allspring Global Investments. “We’re in a period where confidence is very fragile, arguably damaged. Policy makers are trying to reestablish confidence in the system, and you can just see what’s happening in share prices: The confidence hasn’t been restored yet.”…