A popular way to wager on the financial sector Thursday morning dipped below a long-term trend line intraday for the first time in about 14 months. The Financial Select Sector SPDR ETF tumbled 1.6% to 23.92 on Thursday, trading below its 200-day moving average at 23.98 for the first time since early July, according to FactSet data. Market technicians tend to see short-term and long-term moving averages as dividing lines between bullish and bearish trends. Slipping below an average is viewed as a bearish sign. The financial sector has been under recent pressure as Wall Street’s expectations for another interest-rate increase in 2017 has diminished and as benchmark yields have fallen to their lowest level in 2017. The yield on the 10-year Treasury note fell to around 2.05% Thursday after a European Central Bank news conference. Anxieties about North Korea’s recent test of a hydrogen bomb over the Labor Day weekend also have contributed to the swing lower for yields, which move inversely to prices. Recent declines in the 10-year Treasury yield narrows the gap between long- and short-term rates, potentially undercutting banks’ business model of borrowing short term and providing long-term loans. Overall, the stock market was tipping lower, with the Dow Jones Industrial Average down 0.2% at 21,770, the S&P 500 index trading 0.2% lower at 2,461, while the Nasdaq Composite Index was retreating by 0.1% at 6,385. U.S. equities had opened slightly higher on the day.
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From:: Stock Market News