Lincoln National Corp. (LNC), the life insurer with more than $200 billion in assets, gained the most in the Standard & Poor’s 500 Index as signs of stable U.S. jobs growth pushed Treasury yields higher.
Lincoln rose 3.3 percent to $38.21 at 10:32 a.m., the highest intraday price since October 2008. Shares of the Radnor, Pennsylvania-based company are up 48 percent this year.
Yields climbed as jobs growth that was higher than analysts’ estimates fueled bets that the Federal Reserve will begin to reduce its bond purchases. The 10-year Treasury yield rose 19 basis points to 2.69 percent, the highest level since August 2011. Higher interest rates can boost profits for life insurers, which invest premiums from clients in bonds and other assets to back future payouts.
“LNC has elevated sensitivity to low interest rates” because it makes most of its earnings on life insurance and annuities, Jay Gelb, an analyst at Barclays Plc, wrote in a June 6 research note using the company’s ticker symbol. “LNC’s valuation could have upside if interest rates continue to rise.”
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