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Sector Update: Financial Stocks Slide as 10-Year Treasury Yield Climbs Back Above 3% on Expectations for Hawkish Fed Comments

MT Newswires ·  08/23/2022 01:29

01:24 PM EDT, 08/22/2022 (MT Newswires) -- Financial stocks were sharply lower in afternoon trading, with the NYSE Financial Index sliding 1.6% while the SPDR Financial Select Sector ETF (XLF) was off 1.8%.

The Philadelphia Housing Index was dropping 2.1% and the SPDR Real Estate Select Sector ETF (XLRE) was slipping 1.6%.

Bitcoin was declining 0.5% to $21,328, while the yield for 10-year US Treasurys was climbing 4.8 basis points to 3.037% ahead of Jerome Powell's speech later this week, in which the Federal Reserve chairman is expected to stress the need for the central bank to keep raising interest rate to rein in inflation.

In company news, Cannae Holdings (CNNE) slid 1.9% after the investment firm said it will acquire an $84 million equity stake in Computer Services (CSVI), a OTC-traded fintech company that Monday agreed to be acquired by Centerbridge Partners and Bridgeport Partners through an all-cash transaction valued at $1.6 billion. The $58-per-share offer for the target company represents a 53% premium over Friday's closing price. Computer Services shares were nearly 50% higher.

BGC Partners (BGCP) was edging 0.1% lower after the financial brokerage and technology company Monday said it won a lawsuit challenging the company's 2017 acquisition of Berkeley Point Capital. The lawsuit by two union pension funds asserted BGC had to take on hundreds of millions of dollars in debt through the deal while BGC chief executive Howard Lutnick and Cantor Fitzgerald "extracted nearly $1 billion in cash from BGC for their personal benefit," but a Delaware Chancery Court vice chancellor ruled the purchase was entirely fair.

White Mountains Insurance Group (WTM) rose 3.6% after Monday beginning a modified Dutch auction self- tender offer for up to $500 million of its common shares priced between $1,250 to $1,400 per share in cash, reflecting up to 13.8% of its outstanding stock. The tender offer runs through Sept. 20, unless extended or terminated early.

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