One thing that could be hurting the financial ETFs is their small-cap exposure, says John Spence for MarketWatch. The boost that small-caps saw earlier this summer came largely from investors looking to buy low in the beat-up financial sector, but today the enthusiasm is waning.

Existing home sales rose 3.1% last month, which was nearly twice the expected amount, says Alan Zibel for the Associated Press. But the number of unsold homes managed to hit a record high, and prices are still not at their bottom, experts say.

Home sales are off 13% from a year ago, and prices are down 7.1% in the same timeframe.

Affected ETFs:

  • Financial Select Sector SPDR (XLF), down 27.1% year-to-date
  • Regional Bank HOLDRs (RKH), down 23.1% year-to-date
  • iShares Dow Jones Broker-Dealers (IAI), down 35.8% year-to-date
  • DJ Wilshire REIT (RWR), up 0.9% year-to-date
  • iShares Dow Jones US Real Estate (IYR), down 2.9% year-to-date