Why Western Alliance Stock (WAL) Is Falling

Western Alliance Bancorporation WAL shares are trading lower by 4.0% to $50.84 Tuesday morning. Shares of banking and financial services stocks at large are trading lower after Moody's cut the credit ratings of 10 banks and placed others under review for potential downgrades.

Credit rating downgrades signal a lower level of financial stability and increased credit risk for the affected banks. Investors may become concerned about the bank's ability to manage its loan portfolio and maintain profitability. This could prompt them to sell shares in anticipation of potential future losses.

If regional banks are facing credit rating downgrades due to specific issues in their lending portfolios or operations, investors could worry that similar challenges might impact Western Alliance. This can lead to a broader reevaluation of risk within the sector.

What Happened?

Moody’s action comes amid worries about rising financing costs, possible weaknesses in regulatory capital, and escalating risks linked with commercial real estate lending. These concerns are heightened by the declining demand for office space.

“Although the general drain on deposit funding caused by quantitative tightening (QT) moderated in Q2, there remains a significant risk that systemwide deposits will resume their decline in the coming quarters,” Moody’s stated in the report...Read More

According to data from Benzinga Pro, WAL has a 52-week high of $86.87 and a 52-week low of $7.46.