Bank Stocks Rocked By Weak Jobs Data

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.