U.S. stocks soared Thursday after Federal Reserve Chairman Ben Bernanke pledged to keep interest rates at historic lows but one recent outperforming sector missed out on the rally: regional banks.
SPDR S&P Regional Banking ETF (NYSEArca: KRE) has been noticeably weak the past few days after a strong rally that kicked off in late April.
For example, KRE slipped Thursday for the second straight day even though the S&P 500 rose Wednesday and opened sharply higher on Thursday.
The S&P 500 is up more than 2% so far this week while KRE is down over 2%.
The regional bank ETF has pulled back this week along with 10-year Treasury yields after a sharp move higher. [Regional Bank ETFs in Focus on Higher Rates]
Investors will be watching KRE to see if this is just a normal pullback after a strong run, or the start of something worse.
SPDR S&P Regional Banking ETF
Updated with full disclosure: Tom Lydon’s clients own KRE.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.