Bank stocks suffer broad selloff as Treasury yields resume decline

The selloff in financial stocks isn’t unanimous Tuesday, but it’s pretty close, as the yield on 10-year Treasurys resumed their decline after a two-day bounce off last Thursday’s 3-year low. The SPDR Financial Select Sector ETF

XLF, -1.06%

shed 1.1%, with 64 of 68 equity components trading lower, and was the biggest decliner of the SPDR sector ETFs tracking the S&P 500’s 11 sectors. Meanwhile, the SPDR S&P Bank ETF

KBE, -1.24%

slumped 1.3% with 89 of 90 components losing ground and the SPDR S&P Regional Banking ETF

KRE, -1.35%

slid 1.4% with 119 of 122 components declining. There is some overlap among the 3 ETFs’ components. Among the more active stocks, Bank of America Corp.

BAC, -1.83%

shed 1.9%, Citigroup Inc.

C, -0.86%

fell 0.9%, Regions Financial Corp.

RF, -1.79%

lost 2.0% , Wells Fargo Co.

WFC, -0.99%

gave up 1.0% and J.P. Morgan Chase & Co.

JPM, -0.95%

slipped 1.0%. Meanwhile, the 10-year Treasury yield declined 4.2 basis points (0.042 percentage points) to 1.556%. Lower long-term yields can hurt bank profits, as it reduces the spread they earn from funding longer-term assets, like loans, with shorter-term liabilities.

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