Credit ‘Cockroach’ Jitters Shake Markets: Stocks Slide Globally as Gold Hits Record High
A new bout of credit jitters is roiling global markets, sparked by trouble at a pair of midsize U.S. banks. On Thursday, Utah-based Zions Bancorporation and Phoenix-based Western Alliance Bancorp revealed they face hefty losses on problematic loans – including a $50 million charge-off at Zions and a $100 million bad loan at Western tied to alleged borrower fraudtheguardian.com. While relatively small banks, the revelations sent shockwaves through the financial sector. “The event drew inevitable comparisons to the regional bank stress that followed the collapse of Silicon Valley Bank in 2023,” noted Deutsche Bank strategist Jim Reid, “[and] raised broader questions over potential credit quality issues after a lengthy period of elevated rates and expansion in private credit”theguardian.com. Investors wasted no time dumping financial stocks. Regional bank shares cratered, with Zions stock sinking about 12% and Western Alliance down 10% by day’s endts2.tech. The damage wasn’t confined to banks: brokerage firm Jefferies fell roughly 10% after disclosing exposure to two recently bankrupt auto lendersts2.tech. In total, over 80% of S&P 500 stocks closed in the red Thursday as the sell-off broadenedts2.tech. Key indexes shed nearly 1% or more – the Dow plunged ~410 points, while the S&P 500 and Nasdaq
