Sector Update: Financial Stocks Fall Late Afternoon
Financial stocks were lower in late Wednesday afternoon trading, with the NYSE Financial Index falling 1.7% and the State Street Financial Select Sector SPDR ETF (XLF) dropping 1.8%.The Philadelphia Housing Index fell 3.5%, and the State Street Real Estate Select Sector SPDR ETF (XLRE) was down 1.5%.Bitcoin (BTC-USD) was declining 1.9% to $62,133, and the yield for 10-year US Treasuries rose 4 basis points to 4.569%.In economic news, US Federal Reserve officials held diverging views last month on the appropriate path of interest rates, minutes from the central bank's June policy meeting showed Wednesday. The Federal Open Market Committee unanimously decided to maintain its policy rate between 3.50% and 3.75% for the fourth consecutive time at the June 16-17 meeting. At the time, it removed the so-called easing bias from its policy statement.Separately, the International Monetary Fund lowered global economic growth expectations for 2026 as the impact of the Middle East war will likely counter a boost from rising AI adoption.In corporate news, Block (XYZ) will pay $45 million as part of a multistate settlement to resolve allegations that its Cash App failed to protect users from fraud and provide a fraud protection and resolution mechanism as required by law, Nebraska Attorney General Mike Hilgers said Wednesday. Block shares were down 1.8%.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 3.6%.Saratoga Investment (SAR) reported a decline in fiscal Q1 net investment income per share late Tuesday, falling more than the market had anticipated. Its shares fell 14%.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%.
