Bank Stocks Bounce As Brexit Fears Take a Breather
Bank stocks, which took some of the hardest beatings in the wake of the U.K. vote to leave the European Union, bounced in premarket trade Tuesday as investors took a breather from the global risk-off trade for the time being. The SPDR Financial Select Sector ETF climbed 1.1% ahead of the open, after tumbling 8.1% the past two sessions. Shares of Bank of America Corp. surged 2.6%, Citigroup Inc. climbed 2.1% and J.P. Morgan Chase & Co. rallied 1.5%. Over the past two sessions, BofA's and Citigroup's stocks had both plunged 13% while JPMorgan's dropped 10%. The yield on the 10-year Treasury note rose 3.6 basis points early Tuesday, after plunging about 28 basis points the past two sessions. Banks can benefit from rising longer-term interest rates, as it increases the spread they earn from funding longer-term asssets, such as loans, with shorter-term liabilities. Elsewhere, the U.S.-listed shares of the U.K.'s Barclays PLC gained 2.6%, after plummeting 37% the past two sessions.
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