Bank stocks were broadly lower Thursday, to underperform the broader stock market indicators, as the 10-year Treasury yield fell in 3-month lows in the wake of Federal Reserve Chairman Jerome Powell's dovish message. The SPDR Financial Select Sector ETF (XLF) fell 1.5% in premarket trading, while futures for the Dow Jones Industrial Average gave up 223 points, or 0.9%. Among the sectors more heavily weighted members, shares of J.P. Morgan Chase & Co. (JPM) shed 1.5%, Bank of America Corp. (BAC) gave up 1.5%, Wells Fargo & Co. (WFC) lost 1.8% and Citigroup Inc. (C) shed 1.8%. The yield on the 10-year Treasury note fell 2.4 basis points to 0.553%, the lowest yield seen since April 21, after Powell said Wednesday that recent data suggests a slowing in the pace of the recovery, as COVID-19 cases increase. Lower long-term yields can hurt bank profits, as that narrows the spread between what banks earn on longer-term assets, such as loans, which are funded by shorter-term liabilities.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
July 30, 2020 08:40 ET (12:40 GMT)
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