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Oct. 27, 2021, 2:00 p.m. EDT

Financial stocks suffer broad weakness as Treasury yields drop, Capital One's results disappoint investors

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By Tomi Kilgore

Financial stocks took a broad hit Wednesday, as investor disappointment over Capital One Financial Corp.'s /zigman2/quotes/204480509/composite COF -1.02% third-quarter results and the biggest drop in benchmark Treasury yields in three months acted as drags on the sector. The SPDR Financial Select Sector ETF /zigman2/quotes/209660484/composite XLF -1.63% fell 1.2% in afternoon trading with 57 of 65 equity components trading lower, while the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.84% tacked on 0.2%. Capital One's stock tumbled 7.5% to pace the losers even after the financial services company reported third-quarter earnings that rose above expectations, helped by a $770.0 million reserve release. If the reserve release was excluded, the company would have posted a net income decline, and earnings per share would have been reduced by about $1.75. Among other more heavily weighted components of the financial ETF (XLF), shares of Bank of America Corp. /zigman2/quotes/200894270/composite BAC -2.27% shed 1.3%, JPMorgan Chase & Co. /zigman2/quotes/205971034/composite JPM -1.81% gave up 1.9%, Wells Fargo & Co. /zigman2/quotes/203790192/composite WFC -2.37% fell 0.4%, Citigroup Inc. /zigman2/quotes/207741460/composite C -1.65% lost 0.7% and Goldman Sachs Group Inc. /zigman2/quotes/209237603/composite GS -1.24% gave up 1.0%. The yield on the 10-year Treasury note /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% fell 8.4 basis points to 1.535%, the biggest one-day drop in yields since July 19, after data showing a decline in durable goods data. Lower long-term yields can eat into bank profits, as that can lower the spread banks earn as they fund longer assets, such as loans, with shorter term liabilities.

/zigman2/quotes/204480509/composite
US : U.S.: NYSE
$ 141.90
-1.46 -1.02%
Volume: 2.77M
Dec. 3, 2021 4:00p
P/E Ratio
5.30
Dividend Yield
1.69%
Market Cap
$60.40 billion
Rev. per Employee
$607,868
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/zigman2/quotes/209660484/composite
US : U.S.: NYSE Arca
$ 38.03
-0.63 -1.63%
Volume: 97.18M
Dec. 3, 2021 4:00p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,538.43
-38.67 -0.84%
Volume: 2.71B
Dec. 3, 2021 5:35p
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/zigman2/quotes/200894270/composite
US : U.S.: NYSE
$ 43.87
-1.02 -2.27%
Volume: 74.61M
Dec. 3, 2021 4:00p
P/E Ratio
13.12
Dividend Yield
1.91%
Market Cap
$359.04 billion
Rev. per Employee
$445,624
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/zigman2/quotes/205971034/composite
US : U.S.: NYSE
$ 158.29
-2.92 -1.81%
Volume: 12.68M
Dec. 3, 2021 4:00p
P/E Ratio
10.01
Dividend Yield
2.53%
Market Cap
$467.79 billion
Rev. per Employee
$492,730
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/zigman2/quotes/203790192/composite
US : U.S.: NYSE
$ 47.75
-1.16 -2.37%
Volume: 29.22M
Dec. 3, 2021 4:02p
P/E Ratio
11.28
Dividend Yield
1.68%
Market Cap
$190.39 billion
Rev. per Employee
$305,853
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/zigman2/quotes/207741460/composite
US : U.S.: NYSE
$ 62.76
-1.05 -1.65%
Volume: 25.46M
Dec. 3, 2021 4:02p
P/E Ratio
5.87
Dividend Yield
3.25%
Market Cap
$124.53 billion
Rev. per Employee
$423,538
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/zigman2/quotes/209237603/composite
US : U.S.: NYSE
$ 382.73
-4.81 -1.24%
Volume: 2.81M
Dec. 3, 2021 4:00p
P/E Ratio
6.31
Dividend Yield
2.09%
Market Cap
$128.14 billion
Rev. per Employee
$1.31M
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/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
1.36
0.00 0.00%
Volume: 0.00
Dec. 3, 2021 4:56p
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