Banks stock took a broad hit in premarket trading Wednesday, as an inversion in the closely watched 2-year-10-year Treasury yield spread stoked fears of an impending credit crunch. The SPDR Financial Select Sector ETF (XLF) dropped 1.9% ahead of the open, as all of the components seeing premarket activity lost ground. Among the biggest declines, shares of Regions Financial Corp. (RF) fell 3.2%, Citigroup Inc. (C) slid 3.0% and Bank of America Corp. (BAC) shed 3.0%. Elsewhere, the stocks of J.P. Morgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS) both dropped 2.6%, and were the leading early losers among Dow Jones Industrial Average components. Meanwhile, Dow industrials futures tumbled 344 points, or 1.3%. An inverted yield curve ( ) can hurt bank profits, as it can make the usual practice of borrowing shorter term to lend longer term is no longer profitable.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
August 14, 2019 07:56 ET (11:56 GMT)
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