Financial sector companies and exchange traded funds (ETFs) lead the market decline as investors dumped financial banks like Bank of America (NYSE: BAC) on bearish resistance.
BofA shares are down 3.66% while the Financial Select Sector SPDR Fund (NYSEArca: XLF) is down 2.59%.
The stock markets took a turn for the worst as economic data revealed lower-than-expected private-sector job growth and a drop in the PMI. [U.S. Markets and ETFs Stumble On Weak Economic Data.]
Poor private-sector job figures usually translate to a major hurdle for banks since unemployment rates are highly correlated with lower consumer lending, greater default rates on mortgages and higher delinquencies on credit cards.
Nevertheless, analysts believe that the sector remains bolstered by stronger balance sheets as compared to pre-financial crisis levels.