Why Western Alliance Bancorp Stock Rebounded Today
Shares of Western Alliance Bancorp (NYSE: WAL) jumped 7% on Tuesday, following a sharp rebound in interest rates.
Fears surrounding the COVID-19 coronavirus epidemic and the related economic fallout have sent investors running toward safe-haven investments -- most notably U.S. Treasuries -- in recent weeks. This, in turn, has led to a sharp decline in interest rates. (Interest rates move inversely to bond prices, so when investors bid up the price of bonds, rates fall.)
Bank stocks have suffered because of this, since lenders' profit margins tend to fall when interest rates decline. Just yesterday, Western Alliance Bancorp's shares plunged after interest rates fell sharply to historic lows.
Source Fool.com
