Weakness in Citigroup, Bank ETFs Not a Good Sign for Market

May 12th at 10:12am by John Spence

Investors are trying to figure out if recent market turbulence is simply consolidation in a broader really or the start of something more ominous.

For their part, bears can point to a drop in banking giant Citigroup (NYSE: C) after its reverse stock split. Citi shares slipped nearly 3% on Thursday.

The stock accounts for about 7% of SPDR KBW Bank ETF (NYSEArca: KBE), which is in negative territory for the year as trouble in shares of large banks such as Citi and Bank of America (NYSEArca: BAC) have taken a toll.

The bank ETF is in danger of falling below its 200-day moving average as it trails the market in 2011. It was down about 1% on Thursday.

Financial-sector ETFs could see action during the session as Federal Reserve chief Ben Bernanke testifies on new financial regulation before the Senate Banking Committee.

SPDR KBW Bank ETF


The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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