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Sector Update: Financial Stocks Decline in Afternoon Trading

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Financial stocks were lower in Wednesday afternoon trading, with the NYSE Financial Index dropping 1.6% and the State Street Financial Select Sector SPDR ETF (XLF) falling 1.5%.

The Philadelphia Housing Index fell 2.9%, and the State Street Real Estate Select Sector SPDR ETF (XLRE) was down 1.2%.

Bitcoin (BTC-USD) was declining 2.9% to $62,075, and the yield for 10-year US Treasuries rose 4.8 basis points to 4.58%.

In economic news, the minutes from the Fed's policy meeting on June 16-17 are due at 2 pm ET. Investors will parse the views on the direction of interest rates at a time when the market is pricing in hikes. The probability of a 25-basis-point increase in rates is the highest among all other policy outcomes in September, October, and December, the CME FedWatch tool showed Wednesday.

In corporate news, Truist Financial (TFC) faces a tough road ahead amid a leadership change and higher interest rates, BofA Securities said, joining other brokerages that recently downgraded their ratings on the regional bank. BofA lowered Truist's rating to neutral from buy, with a price target of $56. The downgrade follows recent rating cuts by Morgan Stanley, UBS Securities and Raymond James. Truist shares were down 3.3%.

Lemonade's (LMND) recent share price rally has largely priced in the company's growth and earnings outlook, leaving limited room for additional upside without new catalysts, Morgan Stanley said in a note. Morgan Stanley downgraded the stock to equal weight from overweight with a price target of $75. Lemonade shares slumped past 8%.

BlackRock (BLK) is expected to deliver strong Q2 results driven by ETF demand, with shares supported by growth potential, margin expansion, and an attractive valuation, UBS Securities said in a note. BlackRock shares were shedding 2.1%.

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Sectors

Sector Update: Financial Stocks Edge Lower Late Afternoon

Financial stocks were edging lower in late Tuesday afternoon trading, with the NYSE Financial Index down 0.4% and the State Street Financial Select Sector SPDR ETF (XLF) shedding 0.1%.The Philadelphia Housing Index fell 1.8%, and the State Street Real Estate Select Sector SPDR ETF (XLRE) was up 1.7%.Bitcoin (BTC-USD) was decreasing 0.1% to $63,693, and the yield for 10-year US Treasuries rose 5.8 basis points to 4.54%.In economic news, consumer expectations for one-year US inflation growth jumped to 3.7% in June from 3.5% in the previous month, according to a survey released by the New York Federal Reserve Bank. The print is the highest since September 2023.The US international trade deficit widened to $77.59 billion in May from a revised $54.57 billion gap in April, compared with a wider shortfall of $78.4 billion expected in a Bloomberg-compiled survey.Consumer confidence for July rose from the prior month, with the RealClearMarkets' monthly index rising to 45.5 from 42.5 in June.In corporate news, PennyMac Financial Services (PFSI) shares fell 3.8% after Barclays downgraded the stock to equalweight from overweight and cut its price target to $93 per share from $107.Fiserv (FISV) has held talks with JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and PNC Financial Services (PNC) about a potential sale of its STAR Network debit payments business, Reuters reported. Fiserv shares were up 1.6%.HSBC (HSBC) will stop lending to riskier private credit clients that have not provided sufficient returns, Bloomberg reported. The bank will no longer provide back-leverage financing to several clients but will continue to provide them with access to other services, the report said. Separately, HSBC has launched a review of its Turkish retail and corporate banking business and is considering all options, Reuters reported. HSBC shares were shedding 1.4%.Gemini Space Station (GEMI) said Tuesday that it is launching stock trading for customers in the US. Customers in qualifying jurisdictions can now trade in US exchange-listed securities directly from the Gemini app, the company said. Gemini shares fell nearly 5%.

$FISV$GEMI$HSBC$PFSI
Sectors

Sector Update: Energy Stocks Higher Late Afternoon

Energy stocks were higher late Tuesday afternoon, with the NYSE Energy Sector Index rising 2.6% and the State Street Energy Select Sector SPDR ETF (XLE) adding 2.9%.The Philadelphia Oil Service Sector Index was climbing up 2.6%, and the Dow Jones US Utilities Index rose 1.4%.In geopolitical news, Iran's Revolutionary Guard Corps fired missiles at vessels in the Strait of Hormuz, striking a liquefied natural gas carrier, according to media reports. "Oil prices and especially LNG rose after a Qatari LNG ship was struck by a projectile near the Omani coast as it exited the Strait of Hormuz, raising unease among shipowners while once again testing a US-Iran agreement intended to halt attacks and keep the narrow strait open," Saxo Bank said in a note.Front-month West Texas Intermediate crude oil jumped 5% to $72.00 a barrel, and the global benchmark Brent crude contract climbed 5.1% to $75.69 a barrel. Henry Hub natural gas futures added 0.5% to $3.26 per 1 million BTU.In corporate news, Shell (SHEL) expects Q2 oil-and-gas production volumes will decline due to Persian Gulf hostilities, but profit margins will swell, the energy giant reported Tuesday. Separately, Shell has agreed to sell its Shell Downstream South Africa retail and wholesale fuel business to Abu Dhabi's ADNOC Distribution at an implied enterprise value of $1 billion, ADNOC said Tuesday. Shell shares gained 4.7%.TotalEnergies (TTE) will discuss moving toward an offshore exploration contract with Syria, but Chief Executive Patrick Pouyanne said security concerns prevent a return to onshore oil operations for now, Reuters reported. Shares were up 3.1%.Peabody Energy (BTU) was selected by the US Department of Energy for funding to advance rare earth and critical mineral recovery from its Wyoming Powder River Basin resources, the company said Tuesday. Peabody shares were 0.4% higher.Equinor's (EQNR) chief crude trader David Barratt resigned from the company this week, Bloomberg reported. Barratt led the company's global crude-trading book from London, according to the report. Equinor shares rose 6.3%.

$BTU$EQNR$SHEL$TTE
Sectors

Sector Update: Healthcare Stocks Gain Late Afternoon

Healthcare stocks were higher late Tuesday afternoon, with the NYSE Healthcare Index and the State Street Health Care Select Sector SPDR ETF (XLV) each adding 1.4%.The iShares Biotechnology ETF (IBB) climbed 1.4%.In corporate news, Vertex Pharmaceuticals (VRTX) agreed to buy endocrine disease drugmaker Crinetics Pharmaceuticals (CRNX) for a total equity value of about $10 billion. Crinetics shares jumped 98%, and Vertex was down 1.2%.Eli Lilly (LLY) Canada said Tuesday that Health Canada has approved Mounjaro for pediatric patients aged 10 to 17 with type 2 diabetes. Lilly shares rose 2.7%.Vera Therapeutics' (VERA) Trutakna has been approved to reduce proteinuria in adults with primary immunoglobulin A nephropathy, the US Food and Drug Administration said in a Tuesday statement. Vera Therapeutics shares jumped by more than 7%.AstraZeneca (AZN) has signed an agreement to access Helix's genomic datasets to support research for drug discovery and development, Helix said Tuesday. AstraZeneca shares added 1.4%.

$AZN$CRNX$LLY$VERA$VRTX