Popular financial ETF in jeopardy of breaching 200-day moving average for first time in 14 months

A popular way to wager on the financial sector on Wednesday is on the verge of dipping below a long-term trend line for the first time in about 14 months. The Financial Select Sector SPDR ETF tumbled more than 2% to 24.24 on Tuesday and may soon fall below its 200-day moving average at 23.98 for the first time since early July, according to FactSet data. Market technicians tend to see short-term and long-term moving averages as dividing lines between bullish and bearish trends. Slipping below an average is viewed as a bearish sign. In premarket trade the ETF was trading slightly higher. The financial sector has been under recent pressure as Wall Street's expectations for another interest-rate increase in 2017 has diminished and as benchmark yields have slipped to their lowest level in 2017. The yield on the 10-year Treasury note fell to around 2.07% on Tuesday amid anxieties about North Korea's recent test of a hydrogen bomb over the Labor Day weekend and doubts that the Federal Reserve will find economic data supportive enough to lift interest rates once more this year. Recent declines in the 10-year Treasury yield narrows the gap between long- and short-term rates, potentially undercutting banks' business model of borrowing short term and providing long-term loans. On Tuesday, Goldman Sachs Group Inc. , J.P. Morgan Chase & Co., and Bank of America Corp. all declined at least 2%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.