Banks, lenders and other financial companies rose as the yield on the two-year Treasury note hit its highest level in more than eight years.
For the financial sector, rising interest rates could be a double-edged sword, helping lending margins but potentially hurting demand for loans. "If US real long rates were to move above 1.25% and credit spreads were to widen, we would become much more concerned overall about the durability of the [stock-market] rally," said analysts at brokerage Jefferies, in a note to clients.
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Strategists at brokerage Bank of America Merrill Lynch Global Research said a gauge of sentiment on Wall Street was at its most bullish since 2011 in June. The Sell Side Indicator is a contrarian indicator so that extreme bullish sentiment is a bearish sign and vice versa, according to the brokerage.
(-By Rob Curran, firstname.lastname@example.org)
(END) Dow Jones Newswires
July 03, 2017 16:34 ET (20:34 GMT)