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Financial Sector Delivers Muted Performance on Global Negativity

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Jul. 10 2015, Published 8:02 a.m. ET

US stock markets trending down

Events in Greece ruled the headlines last week and its ripple effects were felt in the US stock markets. Investors pulled away from risky assets, choosing instead to put their money into safe-haven investments.

Fears of Greece’s exit from the European Union—commonly known as Grexit—became more worrying following the rejection of austerity measures by the Greek people. The Greek crisis escalated after it became the first developed nation to default on debt repayment to the International Monetary Fund in June.

This, along with stagnating economic growth, has led to a situation where all the gains made by US stocks this year are being washed away. The broad-based SPDR S&P 500 ETF Trust (SPY) has fallen by 1.48% over the last week, and its year-to-date performance has been a meager 1.51%.

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ETF performance overview

The Financial Select Sector SPDR Fund (XLF) closed at $24.54 on Monday, having fallen 1.4% in the last week. Year-to-date, XLF has underperformed the benchmark, falling by 1.9% as opposed to the S&P 500’s 0.61% fall. This is despite positive signals from US banks and rising Treasury yields (TLT). Banks constitute ~48% of the ETF.

On average, just 22 constituents of the 97 stocks in XLF posted positive returns last week. All subgroups except REITs closed the week in negative territory.

These are the stocks that fell the most last week, along with their final results:

  • Affiliated Managers Group (AMG) – -4.86%
  • E*TRADE Financial Group (ETFC) – -4.51%
  • Zions Bancorporation (ZION) – -4.02%
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