LIVE MARKETS-Wall Street indexes end lower; financials a drag

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WALL STREET INDEXES END LOWER; FINANCIALS A DRAG

The three major U.S. stock indexes ended lower on Thursday amid weakness in financials and regional bank shares and as investors worried about continuing trade tensions between the U.S. and China.

Shares of regional bank Zions Bancorporation ZION.O fell 13.1% after it disclosed an unexpected loss on two loans in its California division.

In the latest in U.S.-China trade relations news, China on Thursday accused the U.S. of stoking panic over its rare earth controls and said Treasury Secretary Scott Bessent had made "grossly distorted" remarks about a top Chinese trade negotiator, rejecting a White House call to roll back the curbs.

"We still have a hangover from the Friday tweet of increasing the intensity level of the trade war with China, which hasn't necessarily dissipated this week at all," said Ron Albahary, chief investment officer at LNW in Philadelphia.

"It seems like both sides are digging their heels in, and I think the markets are starting to react to the potential that a more intense trade war could actually hurt not only the world economy, but certainly our economy."

U.S. President Donald Trump last Friday threatened 100% tariffs on China starting November 1 following Chinese curbs on exports of rare earth minerals.

The S&P 500 financial sector .SPSY fell 2.8% and lost the most among major sectors. It had risen this week following mostly stronger-than-expected earnings from major U.S. banks.

Insurers also fell with Travelers Companies TRV.N down 2.9% after the company posted quarterly revenue below estimates.

Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management Company, said that consumer-exposed assets were selling off Thursday, suggesting concerns about consumer credit. "That would include companies like Capital One, regional banks and within industrials, airlines are thought to be the most consumer credit sensitive," he said.

Shares of Capital One Financial COF.N ended 5.6% lower. Airline shares fell with United Airlines UAL.O leading losses with a 5.6% decline.

Here is the closing market snapshot:

(Caroline Valetkevitch, Chuck Mikolajczak, Sinéad Carew)

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