Band David Henry
March 29 (Reuters) – U.S. bank stocks fell widely on Monday following news of losses at some global investment banks after a fund failed, even knocking down stocks of domestic lenders typically withdrawn from stock markets.
KBW Nasdaq Bank Stock Index .BKX fell to 3.4% before reducing losses to 2% by mid-afternoon. Actions of major US banks and even regional banks, like Truist Financial TFC.N and PNC Financial Services Group PNC.N, discontinued after Nomura Holdings Inc 8604.T and Credit Suisse Group AG CSGN.S warned of billions of dollars in potential losses after a fund, named by sources Archegos, defaulted on margin calls.
“It’s a perfect excuse for any investor to take a profit in financials,” said Christopher Marinac, director of research at Janney Montgomery Scott. “Bank stocks have done very well this quarter.
“The real question is whether this becomes a larger systemic incident that lasts for several weeks,” he said.
The KBW index had gained 24% this year until Friday.
Bank stocks benefited significantly from the rise in bond yields, which could boost net interest income. The roll-out of vaccinations and government stimulus programs have also fueled optimism about loan growth and lower-than-expected losses on bad debts.
Several days this year, bank stocks went up or down with the yield on 10-year US Treasury bills US10YT = RR, says Marinac.
Late monday Morning Bank stocks began to rally from their initial lows after the 10-year yield hit 1.70% from 1.66% on Friday.
(Report by David Henry in New York, editing by Richard Chang)
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