Shares of State Street Corp. slumped 0.4% in afternoon trade Wednesday toward a three-year low, extending losses after the financial services company warned that second-quarter net interest income (NII) would miss expectations given "the recent and significant turn in the interest rate environment." The stock had dropped 3.7% on Tuesday, after Chief Financial Officer Eric Aboaf said Tuesday at the Morgan Stanley U.S. Financials Conference that net interest income is now expected to be down about 8% from the first quarter, while the current FactSet NII consensus of $657 million implies a 2.4% sequential decline. Aboaf said the two main factors that are negatively impacting NII: a rotation into interest-bearing deposits from noninterest-bearing deposits, which has increased costs; and the flattening yield curve, particularly the decline in longer-term yields, has resulted in lower investment yield. The 10-year Treasury note yield has fallen to 2.121% on Wednesday from 2.686% at the end of 2018. UBS cut its stock price target to $68 from $75 while keeping its buy rating, while Raymond James lowered its target to $68 from $84 but maintained its strong buy rating. State Street's stock was on track to close at the lowest price since July 13, 2016. The stock has tumbled 20.5% the past three months and 13.1% year to date, to pace the SPDR Financial Select Sector ETF's decliners over both those time periods. The financial ETF has gained 3.0% the past three months and the S&P 500 has advanced 3.1%.