Banks, lenders and other financial companies rose as traders bet the rebound in financial markets will make a rate increase more likely. Matthew Peterson, chief wealth strategist for brokerage LPL Financial, said the likelihood of a major change in policy direction being teased at next week's central-bank confab in Jackson Hole, Wyo., has narrowed after the release of the Federal Reserve's minutes. But the speculative froth in markets could yet be a factor, Mr. Peterson noted. "Normally, as the Fed increases interest rates, it would be expected that financial conditions should tighten," said Mr. Peterson, in a note to clients. "However, this hasn't been the case with this rate hike cycle, potentially indicating that the Fed needs to tighten more." U.S. banks' earnings rose 10.7% to $48.3 billion in the second quarter from a year earlier, indicating the sector is continuing its postcrisis recovery, a bank regulator said.
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(END) Dow Jones Newswires
August 22, 2017 16:36 ET (20:36 GMT)