The financial sector was hit hard in premarket trading Tuesday, as concerns over the potential impact of the omicron variant of COVID on the economy sent Treasury yields sharply lower. The SPDR Financial Select Sector ETF (XLF) slid 1.5% ahead of the open toward a seven-week low, with 58 of its 65 equity components trading lower, while futures for the S&P 500 were down 0.8%. Among the more-active ETF components, shares of Citigroup Inc. (C) slumped 2.0%, Morgan Stanley (MS) slid 1.6%, JPMorgan Chase & Co. (JPM) lost 1.8%, Bank of America Corp. (BAC) dropped 2.0% and Wells Fargo & Co. (WFC) declined 2.0%. The yield on the 10-year Treasury note declined 10.6 basis points to a two-month low of 1.424%, and has now dropped 24.3 basis points over the past four sessions. Lower longer-term interest rates can hurt bank profits, as it narrows the spread they earn on longer-term assets, such as loans, that are funded with shorter-term liabilities.
(END) Dow Jones Newswires
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