Shares of large banks required to undergo the Federal Reserve's stress tests took a hit in premarket trading Friday, after the Fed voted to require the suspension of stock buybacks and to cap dividends, given the uncertain outlook resulting from the COVID-19 pandemic. Although the banks passed the Fed's tests, the Fed said some banks may have to cut dividends. The SPDR Financial Select Sector ETF (PSE:XLF) fell 1.4%, after rallying 2.7% on Thursday to bounce off a 5-week low. Among the more-active components ahead of the open, shares of Wells Fargo & Co. (NYS:WFC) shed 2.7%, Bank of America Corp. (NYS:BAC) fell 2.3%, Citigroup Inc. (NYS:C) slipped 0.8%, J.P. Morgan Chase & Co. (NYS:JPM) dropped 1.4% and Goldman Sachs Group Inc. (NYS:GS) gave up 3.2%. The selloff comes while futures (CBT:YM00) for the Dow Jones Industrial Average (DOW:DJIA) slipped 54 points, or 0.2%.
June 26, 2020, 6:22 a.m. EDT