Financial ETFs Stumble After Banks Make Moves

The financial sector and exchange traded funds (ETFs) are turning south in early trading today after two hints that the credit crisis isn’t exactly finished wreaking havoc.

First, Wachovia (WB) forced out CEO Ken Thompson, who was the third CEO of a major U.S. financial institution to lose his job because of the credit mess. It’s just a reminder of the mess we’re still in and its aftermath, reports Madlen Read for the Associated Press. Washington Mutual (WM) said it was replacing its CEO as chairman, as well.

Several financial ETFs contain Wachovia:

• Financial Select Sector SPDR (XLF): down 14.6% year-to-date; Wachovia is 3%
• Regional Bank HOLDRs (RKH): down 12.6% year-to-date; Wachovia is 10.3%
• PowerShares FTSE RAFI Financials (PRFF): down 14.2% year-to-date; Wachovia is 3.4%; Washington Mutual is 1.6%