Three sectors to watch in volatile interest rate market

The major stock indices (^DJI, ^GSPC, ^IXIC) are trading higher through midday. Look for stocks to stay in the narrow trading range they've been in for much of the year, at least for now. Keith Bliss of Cuttone and Company says a move out of that rut may be coming soon. "Both the S&P 500 and the Dow Jones Industrial Average are in a bullish pattern," Bliss notes. "But...it has to work it's way out. The S&P 500 probably in a couple weeks and the Dow not until July...The bullish lights are still all green."

There are however some sectors that are not just chugging along tracking a market that can’t seem to break up or down. Those, says Yahoo Finance Senior Columnist Michael Santoli, are the kinds of industries that are impacted by interest rates.

Get the Latest Market Data and News with the Yahoo Finance App

A look at the ten year yield shows a healthy dose of volatility, the exact opposite of equity markets and atypical for what many investors usually see as a calmer market.

Santoli says this volatility in yields comes from several different directions: the ECB, Greece and questions about Fed policy ahead of this Friday’s jobs report.

Here are three areas to keep an eye on as long as the roller coaster continues:

Utilities
Typically a yield play, Santoli notes that “when treasury yields go up these guys go down.” That has been the case consistently from February through today. Utilities are tracked by the Utilities Select Sector SPDR Fund (XLU)

Regional banks
The S&P bank ETF (KBE) tracks regional banks and Santoli notes it broke out late last month when Treasury yields surged. That is of particular interest because, as Santoli says, “regional banks are typically a bellwether group for the Main Street economy and that’s a good thing.”

Life insurers
Much like the regional banks, life insurance companies like MetLife (MET) jumped along with rates. Using today as a perfect example, MetLife is up more than 2% while the broader market is again, flat.

Bonus: Online brokers
Santoli offers a bonus fourth industry noting online brokers are “beneficiaries of higher yields because they earn that income on customer cash.”