Bank stocks turned sharply lower in premarket trade Friday, as disappointing jobs data suggested the Federal Reserve may delay interest rate increases. The SPDR Financial ETF swung to a loss of 1.9%, after trading up 0.7% just prior to 8:30 a.m. ET, when the jobs data was released. Among some of the XLF's more active components, shares of Bank of America Corp. shed 2.4% after being up 0.5% just before the data; Citigroup Inc. swung to a 2% decline from a 0.3% gain; J.P. Morgan Chase & Co. slumped 1.9%, after being up 0.5%; and Wells Fargo & Co. slid 2%, after trading up as much as 0.6%. Banks tend to benefit from rising interest rates because it increases the spread between the interest rate they charge on longer-term loans and the shorter-term rate they pay to fund those loans. Bank investors appear to be worried that the Fed may be wait a little longer to start raising rates, after September nonfarm payrolls grew by just 142,000, below expectations of 200,000.
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