Shares of banks and other financial institutions fell after another downgrade for banks' credit ratings.

Shares of The SPDR S&P Regional Bank exchange-traded fund, which tracks a basket of regional banks, fell by more than 2% after S&P Global Ratings cut ratings on five mid-sized lenders, echoing critiques from other credit-ratings firms on funding, liquidity and asset quality in light of the slowdown in office rentals and commercial real estate.

Shares of small bank Republic First Bancorp plunged after the Nasdaq Market told the company its stock would be delisted on Wednesday after it failed to file its annual report in time. One strategist said bank shares and financial markets as a whole have been adjusting to the reality that elevated interest rates will be around for the foreseeable future.

The yield on the 10-year Treasury lingered near multidecade highs around 4.3%. "Typically, this type of move in the yield curve signifies an improvement in economic conditions," said John Lynch, chief investment officer at Comerica Bank. "However, it could also be conveying a more ominous message to investors, given the increase in federal deficit spending."

Shares of Carl Icahn's hedge-fund firm, Icahn Enterprises, fell sharply, bringing it within sight of its 52-week low of $18.03, after a New York Times article highlighted the blow to the firm's credibility from the damning report produced by short-selling firm Hindenburg Research.


Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

08-22-23 1756ET