Financial stocks were set up for a selloff Tuesday, amid concerns over the continued drop in Treasury yields. The SPDR Financial Select Sector ETF shed 0.6% in premarket trade. Among the sector tracker’s most heavily-weighted components, shares of Bank of America Corp. shed 0.8%, J.P. Morgan Chase & Co. lost 0.8%, Citigroup Inc. dropped 0.7%, Wells Fargo & Co. lost 0.4% and Goldman Sachs Group Inc. gave up 0.6%. The yield on the 10-year Treasury note dropped 0.037 percentage points to 2.147%, the lowest level seen since Nov. 11, as geopolitical jitters helped drive investors into safe haven investments. Lower long-term interest rates can reduce bank profits, as it reduces the spread between what banks earn on longer-term assets, such as loans, and the shorter-term rates they pay to fund those assets. The financial ETF has edged up 1% year to date through Monday, while the S&P 500 has gained 8.8%.
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