Lincoln, MetLife Lead Insurer Slump as Yields Fall on Jobs Data

  • Prudential, Genworth, Voya, Principal shares also decline
  • Treasury 10-year rates fall below 2% first time since August

U.S. life insurers, a group that holds more than $2 trillion in bonds, slumped in New York trading after a weaker-than-expected jobs report pushed yields lower.

Lincoln National Corp. dropped $1.83, or 3.9 percent, to $45.70 at 9:53 a.m. Friday in New York. MetLife Inc., the largest company in the industry, fell 3.8 percent.

The yield on the 10-year Treasury declined below 2 percent for the first time since August on speculation that the Federal Reserve will wait until next year to lift interest rates after the Labor Department said the U.S. gained 142,000 jobs in September, missing the 201,000 forecast in a Bloomberg News survey. Because insurers invest most of their portfolios in bonds, lower rates pressure earnings.

“Lincoln National screens as one of the most rate-sensitive names,” Randy Binner, an analyst at FBR Capital Markets, said in a note to clients Friday.

Prudential Financial Inc., the second-largest U.S. life insurer, slipped 3.5 percent. Richmond, Virginia-based Genworth Financial Inc. lost 3 percent. Voya Financial Inc. dropped 2.3 percent and Principal Financial Group Inc. fell 2.9 percent.