Exchange-traded funds tracking the financial sector and banks rallied Thursday as bond yields rose. The Financial Select Sector SPDR Fund was up 1% late morning, as was the Invesco KBWB Bank ETF . The Vanguard Financials ETF gained 0.9%. On Thursday morning, the yield on the 10-year U.S. Treasury note jumped more than 5 basis points to about 1.667%, after sticking in a range around 1.6% for several weeks. Banks can be more profitable in a rising-rate environment, and since they make money from lending money at higher rates than those they pay on deposits, deeply depressed rates are more challenging for them. Investors are likely selling bonds as an improving economy makes riskier assets more attractive. Bond yields and prices move in opposite directions.

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