Financial Markets                      10/16 15:25

   

   NEW YORK (AP) -- U.S. stocks fall on Thursday, hurt by drops for midsized 
banks as worries flare about the loans they've made.

   The S&P 500 slid 0.6% in its latest up-and-down day after erasing a morning 
gain. The Dow Jones Industrial Average dropped 301 points, or 0.7%, and the 
Nasdaq composite lost 0.5%.

   Zions Bancorp. tumbled 13.1% after the bank said its profit for the third 
quarter will take a hit because of a $50 million charge-off related to loans 
made to a pair of borrowers. Zions said it found "apparent misrepresentations 
and contractual defaults" by the borrowers and several people who guaranteed 
the loans, along with "other irregularities."

   Another bank, Western Alliance Bancorp, dropped 10.8% after saying it has 
sued a borrower, alleging fraud. It also said it's standing by its financial 
forecasts given for 2025.

   Scrutiny is rising on the quality of loans that banks and other lenders have 
broadly made following last month's Chapter 11 bankruptcy protection filing of 
First Brands Group, a supplier of aftermarket auto parts. The question is 
whether the hiccups are just a collection of one-offs or a signal of something 
larger threatening the industry.

   Thursday's swings on Wall Street, where the Dow bounced from an early gain 
of 169 points to an afternoon loss of 472, fit the pattern of the week for 
stocks. They've been shaky since the end of last week, when President Donald 
Trump shattered a monthslong calm in the U.S. stock market by threatening much 
higher tariffs on China.

   Thursday's swoon erased an early morning gain driven by an encouraging 
signal about the artificial-intelligence boom.

   Taiwan Semiconductor Manufacturing Co. reported a bigger jump in profit for 
the latest quarter than analysts expected. Chief Financial Officer Wendell 
Huang also said TSMC expects "continued strong demand for our leading-edge 
process technologies" going into the end of the year.

   That's important for the U.S. stock market because TSMC is a critical player 
in the AI frenzy, making chips for such companies as Nvidia. And Nvidia and 
other AI stocks have been central to Wall Street's surge to records this year, 
even though inflation is still high and the job market is slowing.

   AI-related stocks have shot so high that critics worry about a possible 
bubble, like the one that imploded for dot-com stocks in 2000.

   U.S. companies broadly are under pressure to deliver stronger profits after 
the S&P 500 surged 35% from a low in April. To justify those gains, which 
critics say made their stock prices too expensive, companies will need to show 
they're making much more in profit and will continue to do so.

   Travelers dropped 2.9% Thursday even though the insurer reported a stronger 
profit for the latest quarter than analysts expected. Its revenue fell short of 
forecasts.

   Hewlett Packard Enterprise fell 10.1% after detailing long-term financial 
targets that some analysts found underwhelming.

   They helped overshadow a 4% gain for Salesforce, which unveiled a plan to 
deliver more than 10% in compounded annual revenue growth in coming years.

   J.B. Hunt Transport Services trucked 22.1% higher after the freight company 
breezed past Wall Street's profit targets in the third quarter.

   All told, the S&P 500 fell 41.99 points to 6,629.07. The Dow Jones 
Industrial Average dropped 301.07 to 45,952.24, and the Nasdaq composite sank 
107.54 to 22,562.54.

   In the oil market, crude prices swung lower after Trump agreed to meet with 
Russia's Vladimir Putin in Hungary in hopes of resolving the war in Ukraine. 
The war has had the United States trying to cut off purchases of Russian oil.

   A barrel of U.S. crude gave up an early gain to drop 1.4% to $57.46. Brent 
crude, the international standard, fell 1.4% to $61.06 per barrel.

   In stock markets abroad, indexes climbed across much of Asia and Europe.

   South Korea's Kospi soared 2.5% on hopes that a trade deal may be coming 
between Seoul and Washington. Samsung Electronics and automakers Hyundai Motor 
and Kia Corp. were among the big gainers.

   In the bond market, Treasury yields dropped as investors herded toward 
investments considered safer. The yield on the 10-year Treasury sank to 3.97% 
from 4.05% late Wednesday.

   Gold also rose in the hunt for safer investments. It climbed 2.5% to 
$4,304.60 per ounce, bringing its stunning gain for the year so far to roughly 
63%.

   A report in the morning said manufacturing activity in the mid-Atlantic 
region is unexpectedly shrinking. It's one of the few windows into the economy 
that the Federal Reserve has been getting recently as it tries to figure out 
whether high inflation or the weak job market should be the bigger concern for 
the economy.

   The U.S. government's shutdown is delaying important updates on the economy, 
such as a weekly update on unemployment claims that typically helps guides Wall 
Street's trading each Thursday. A day earlier, an important report on inflation 
was also delayed.

   ___

   AP Writers Teresa Cerojano and Matt Ott contributed.

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