Higher dividends make U.S. banks look like utility stocks

Banks emerged as an alternative to utilities for income-seeking stock investors even before the largest U.S. lenders passed the Federal Reserve’s stress tests. The projected dividend yield on the KBW Bank Index surpassed the yield on the Dow Jones Utility Average a week ago for the first time since February 2009, according to data compiled by Bloomberg. The milestone was reached three days before the release of the test results, which led 13 of the 24 companies in KBW’s index to raise dividends or say they will consider doing so. “Move over, utilities,” Mike Mayo, a Wells Fargo & Co. bank analyst, wrote in a note.

Will U.S. bond yields climb? Not if stocks are any guide

Some of the most interest-rate-sensitive U.S. stocks are signaling that bond yields won’t move up any time soon, according to Renaissance Macro Research LLC. The firm cited a chart created by Michael Guttag, a managing director, in a Twitter post Tuesday. Guttag compared a ratio of bank and utility stocks within the S&P 1500 Composite Index -- consisting of all the shares in the S&P 500, MidCap 400 and SmallCap 600 indexes -- with the yield on 10-year Treasury notes. The ratio peaked in March of last year and then dropped 28 percent through Tuesday. “We’re not banking on higher yields,” Renaissance wrote.