PacWest Shares Plunge 28% Following Third Major Bank Failure

Shares of PacWest and Western Alliance dropped sharply on Tuesday as the fallout from the third major bank failure this year continued to pressure the sector. The SPDR S&P Regional Banking ETF also sank 6.3 percent. Over the weekend, regulators seized troubled regional bank First Republic and sold it to JPMorgan Chase, which was the third failure of a large regional bank this year. The recent bank failures and expected regulatory changes in response to them have also raised questions about the long-term profit outlooks for mid-sized regional banks. Additionally, the possibility of more Fed rate hikes could further impact the sector.