Financial stocks traded broadly lower Tuesday, as longer-term Treasury yields continued to fall amid growing concerns that a recession was on the horizon. Lower longer-term yields can weigh on banking profits, as they narrow the spread between what banks earn on longer-term assets, such as loans, that are funded by shorter-term liabilities. The SPDR Financial Select Sector ETF slid 1.5% in afternoon trading, with 56 of 66 equity components losing ground, to outpace the S&P 500’s 0.9% decline. Among the ETF’s more-active components, shares of Bank of America Corp. declined 2.4%, Citigroup Inc. shed 1.7%, Wells Fargo & Co. dropped 0.9% and JPMorgan Chase & Co. gave up 1.5%. The most-active of the gainers was Synchrony Financial’s stock , which gained 0.6%. Meanwhile, the yield on the 10-year Treasury note fell 8.7 basis points (0.087 percentage points) to 2.802%, and have lost 40.4 basis points amid a four-day losing streak. The yield briefly fell below the 2-year Treasury yield , something known as a yield-curve inversion, which often foretells an economic recession.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
