(Reuters) – The U.S. bank sector has been pummeled this year but investors hunting for bargains there may need deep reserves of patience as banks are particularly sensitive to low interest rates, the uneven economic recovery and the muddy stimulus outlook.
The S&P 500 Bank subsector , which kicks off its third-quarter earnings season on Oct. 13, was last down 33.7% for the year-to-date compared with a 5.8% gain for the S&P 500 index.
Banks have been such a drag on the broader S&P financial index that its 19% year-to-date decline is second only to energy’s 49.9% drop among the S&P 11 major sectors.
To be sure, if lawmakers in Washington manage to reach an agreement, a new fiscal stimulus package could help banks if it boosts U.S. loan growth, interest rates and economic activity.
And the bank index is up 12% from its intraday trough on Sept. 2 to