Financial stocks spiked higher in morning trading Tuesday, then quickly fell back down, after the Federal Reserve's surprise inter-meeting interest rate cut (Bank of America Corp. (BAC) slumped 2.9% and Citigroup Inc. (C) shed 1.3%. Those stocks were down as much as 3.0%, 2.9% and 2.8%, respectively, before the rate cut. The yield on the 10-year Treasury note reached an intraday high of 1.144% before the rate cut, but fell sharply after to 1.092%. Lower longer-term yields can hurt bank earnings, as it narrows the spread between what they earn on longer-term assets, such as loans, that are funded with short-term liabilities. The yield on the 10-year Treasury note). The SPDR Financial Select Sector ETF (XLF) was down about 2.4% just before the rate cut, then soared to a gain of a much as 1.1% soon after. The rally didn't last long, as the ETF was now down 1.9%. Among the ETF's most-active components, shares of J.P. Morgan Chase & Co. (JPM) dropped 2.6%,
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
March 03, 2020 16:32 ET (21:32 GMT)
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