PacWest pares gains after dividend cut fails to stem market fears

📆 5/8/2023 5:15 PM
📰 Reuters

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PacWest Bancorp shares pared early gains on Monday, dragging down other U.S. regional banking stocks, as the Los Angeles-based lender's decision to slash its quarterly dividend failed to stem worries about its financial stability.

"Friday was a bit of a reprieve, but we continue to believe that equity manipulation, if unabated, presents a risk to the confidence needed for the U.S. banking system to function," Piper Sandler analyst Mark Fitzgibbon wrote in a note.

But hedge funds, which often engage in short selling, pushed back on Monday, saying in a letter to Gensler that a ban would be counterproductive. "Banning short selling will only increase market volatility, hurt price discovery, and delay a recovery in regional banks' prices," wrote Bryan Corbett, chief executive of the Managed Funds Association trade group.

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U.S. stocks limp higher at open as regional-bank shares recoverU.S. stocks opened marginally higher on Monday as investors focused on a recovery in stocks of regional lenders including PacWest and other hard-hit names. The Dow Jones Industrial Average was essentially flat at 33,666:
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