Shares of banks and other financial institutions were flat as economic concerns offset the positive implications of rising interest rates for banks.
Stronger-than-anticipated inflation data drove up Treasury yields in anticipation of more Federal Reserve rate increases. Rate increases are a double-edged sword for banks, because they boost profit margins on loans but can crimp demand.
"The [Fed's] goal is they want to dampen demand," said Quincy Krosby, chief global strategist at brokerage LPL Financial. "Banks yes, they enjoy a strong net interest margin, however, not if the backdrop of the economy is going to be hurt."
There are already signs of slowing demand, according to Ms Krosby and other strategists. A recent bank survey from brokerage Bank of America Securities revealed "tighter lending standards and weaker demand for business and consumer loans."
Goldman Sachs authorized a new share repurchase program of up to $30 billion.
Thomas H. Lee, a leveraged-buyout pioneer who engineered takeovers of household names such as Snapple and Warner Music Group, died unexpectedly at 78, his colleagues and family said late Thursday.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
02-24-23 1734ET
