Financial stocks set for broad selloff as Treasury yields keep falling

MW Financial stocks set for broad selloff as Treasury yields keep falling

The financial sector is bracing for a broad selloff Thursday, amid weakness in the broader market and continued declines in Treasury yields. The SPDR Financial Select Sector ETF $(XLF)$ slumped 1.8% in premarket trading, enough to pace the declines in all of the SPDR ETFs tracking the S&P 500's 11 sectors. Among the financial ETF's most heavily weighted components, shares of Berkshire Hathaway Inc. (BRKA) fell 1.4%, J.P. Morgan Chase & Co. $(JPM)$ shed 2.1%, $Bank of America Corp(BAC-N)$. $(BAC)$ dropped 2.6%, Wells Fargo & Co. $(WFC)$ gave up 2.7% and $Citigroup Inc(C-N)$. $(C)$ slid 2.4%. The declines come as S&P 500 futures slumped 1.4% and the yield on the 10-year Treasury note was down 4.8 basis points to a 5-month low of 1.271%, amid concerns over future economic growth. Falling longer-term interest rates can hurt bank profits, as they reduce the spread banks earn on longer-term assets, such as loans, which are funded by shorter-term liabilities.

-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com

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July 08, 2021 08:35 ET (12:35 GMT)

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