Futures for the Dow Jones industrial average, S&P 500 index and Nasdaq 100 fell slightly in Sunday evening trading. Dow futures edged down 0.1% while S&P 500 and Nasdaq 100 futures dipped 0.2%.
The major averages all rose slightly in the past week, with the Nasdaq composite briefly setting an all-time high on Friday.
But JPMorgan Chase (JPM) and Goldman Sachs (GS), both Dow industrials components, retreated last week, along with Bank of America (BAC), Citigroup (C), Morgan Stanley (MS) and a slew of other banks. Several bank stocks, notably Goldman and Morgan Stanley, are testing their 50-day moving averages.
The Federal Reserve’s decision not to signal faster interest rate hikes after Wednesday’s expected quarter-point increase buoyed most stocks. But banks sold off as Treasury yields fell, especially at the high end. Lower yields and a flatter curve between short- and long-term maturities hurts banks’ borrow short, lend long profit model.
IBD’S TAKE: Financial stocks often are sensitive to interest rates swings, but not all: Here’s a big-cap financial stock that in buy range now.
JPMorgan, which gapped up at the beginning of March as investors priced in the March 15 Fed hike, fell about 1% in Friday stock market trading, essentially at its lowest levels of the month, but still not too close to its rising 50-day line.
Fellow Dow stock Goldman Sachs sank 1.7% to 243.92 on Friday, closing just above its 50-day line. So did the other big pure-play investment bank Morgan Stanley, which retreated 2.8% Friday.
Bank of America sank 1.4% on Friday, but is comfortably above its 50-day line. BofA tested its 50-day in early February, then had a solid advance through March 1.
Citigroup, which was one of the few big banks to trade below its 50-day line earlier this year, fell 1.3% to 60.37 on Friday. Citigroup crossed a 61.73 buy point several times this month, but never closed above that level.
PNC Financial (PNC) is approaching its 50-day line, Regions Financial (RF) briefly undercut that level on Friday, while BB&T Corp. (BBT), Keycorp (KEY) and Suntrust Financial (STI) all closed the week below that support area.
Keep in mind that in most of these cases, the stock are not far multi-year highs.
In Asian Monday intraday, stocks edged higher in Australia, China and Hong Kong, while falling modestly in Japan.