Sector Update: Financial Stocks Unable to Sustain Prior Advance After Fed Signals Plans to Boost Interest Rates

Last Updated: Wednesday, January 26, 2022 3:50 PM | MT Newswires

Financial stocks reversed direction during afternoon trading after the Federal Reserve said it likely "will soon be appropriate to raise" interest rates, although it did not specify a March start date for an increase in the target range for the federal funds rate like many market participants expected.

At last look, the NYSE Financial Index was dropping 0.4%, while the SPDR Financial Select Sector ETF (XLF) was down 0.1%.

The yield for 10-year US Treasuries, meanwhile, resumed its recent advance following the FOMC statement, climbing 6.5 basis points to 1.848%.

In company news, Exela Technologies (XELA) was riding a nearly 19% gain in heavy volume after the transactions processor said it would provide investors with up to $100 million of its unsecured 6% senior notes maturing in March 2029 in exchange for an equal amount of their common shares. The tendered shares will be retired, Exela said, reducing the number of its outstanding shares by as much as 29%.

Stifel Financial (SF) added 6.2% after the brokerage and investment banking firm reported non-GAAP Q4 net income of $2.23 per share, improving on a $1.67 per share profit during the same quarter in 2020 and easily beating the Capital IQ consensus expecting a $1.89 per share adjusted profit. Net revenue increased 22.6% year-over-year to $1.30 billion, also topping the $1.22 billion analyst mean.

Customers Bancorp (CUBI) climbed 1.4% after Wedbush Wednesday raised its price target for the bank holding company by $5 to $80, citing its "tremendous" diversity of revenue sources and its likely path for growth over the next two years. Wedbush also maintained its outperform rating on the company's stock.

Independent Bank (IBTX) rose 1.2% after it increased its quarterly cash dividend by 5.6% to $0.38 per share.

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