Regional Bank Sector Takes Fed's No-hike Decision Pretty Hard
The regional bank sector took the news of no interest rate increase pretty hard. The SPDR S&P Regional Bank ETF flipped from a gain of about 0.5% to a loss of as much as 1.6% after Federal Reserve said it was standing pat, before bouncing slightly. The ETF was last down 1.1%. It's still up 1.4% so far this month, but has lost 5.8% over the last three months, while the S&P 500 has slipped 4.7%. Among the ETF's most heavily-weighted components, shares of National Penn Bancshares Inc. fell 1%, Sterling Bancorp shed 0.8% and Great Western Bancorp Inc. dropped 2.4%. 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.
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