Banks Could Be First Rate Casualty

Merrill Lynch cut its ratings on several financial stocks Thursday, saying a sharp jump in long-term interest rates makes them look fully valued.

Financial sector stocks weren't responding: The American Stock Exchange Broker/Dealer Index was up almost 1%, while the Philadelphia Stock Exchange/KBW Index was flat.

Merrill dropped its intermediate-term ratings to sell from neutral on a handful of asset managers, brokerages and market makers, including Huntington(HBAN Quote), Instinet(INET Quote), Charles Schwab(SCH Quote) and T. Rowe Price(TROW Quote). ...