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REIT stocks rally as high dividend yielders boosted by drop in Treasury yields

Tomi Kilgore

Shares of real estate investment trusts rallied Wednesday, as the drop in the 10-year Treasury note yield to a 2 1/2-year low helped make high dividend yielders more attractive. The SPDR Real Estate Select Sector ETF hiked up 1.3%, to lead all of the S&P 500's 11 sectors higher. Of the REIT ETF's (XLRE) 32 components, 31 traded higher. Among the XLRE's more-active components, shares of Host Hotels & Resorts Inc. rose 1.3%, Weyerhaeuser Co. gained 1.2%, Kimco Realty Corp. tacked on 0.9%, Ventas Inc. added 2.2% and American Tower REIT climbed 2.2%. Of the XLRE's highest yielders, Macerich Co.'s stock yields 9.03% and slipped 0.1% after gaining 2.4% on Tuesday; and Iron Mountain Inc. shares gained 0.9% and yields 7.68%, after surging 2.9% on Tuesday. The XLRE's implied dividend yield is 3.24%, compared with the S&P 500's yield of 1.92%. The yield on the 10-year Treasury note fell 2.4 basis points to 1.952%, on track for the lowest close since November 2016.