Financial stocks enjoy broad surge as Treasury yields bounce
The financial sector was the strongest of the S&P 500's 11 sectors in afternoon trading Friday, buoyed by a big bounce in Treasury yields, to recover all of what it lost in the previous session. The SPDR Financial Select Sector ETF rallied 2.8%, with 62 of 65 components gaining ground, after falling 2.0% on Thursday. Among the financial ETF's (XLF) most heavily weighted components, shares of Berkshire Hathaway Inc. rose 2.3%, J.P. Morgan Chase & Co. gained 3.2%, Bank of America Corp. hiked up 3.5%, Wells Fargo & Co. ran up 3.9% and Citigroup Inc. climbed 2.6%. The yield on the 10-year Treasury note bounced 6.8 basis points to 1.356%, after falling 19.2 basis points over the past four days to close Thursday at a near 5-month low. Bank profits often get a boost when Treasury yields rise, as that tends to widen the spread banks earn on longer-term assets, such as loans, that are funded by shorter-term liabilities.
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