Financial Stocks Turns Sharply Lower After Weak Jobs Report

By Tomi Kilgore Markets MarketWatch Pulse

Financial stocks turned sharply lower ahead of Friday's open, after Treasury yields sank in the wake of a much weaker-than-expected May jobs report. The SPDR Financial Select Sector ETF slumped 1.6% in premarket trade, after trading up 0.1% before the jobs report was released. Among the ETF's more heavily-weighted components, shares of J.P. Morgan Chase & Co. shed 1.8%, of Bank of America Corp. lost 2.8%, of Citigroup Inc. slid 2.8%, of Wells Fargo & Co. declined 1.7% and of Goldman Sachs Group Inc. gave up 1.9%. The yield on the 10-year Treasury note dropped 6.7 basis points to 1.744%, after the Labor Department said only 38,000 new jobs were created in May, below expectations of 155,000 jobs. Lower long-term yield can hurt bank earnings as they compress margins banks earn on loans.

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