Stocks and exchange traded funds (ETFs) fell sharply in morning trading as many investors dumped financials, grab their returns from a six-week rally and head for the hills.

Many believe that credit losses are worsening and lower commodity prices are dragging down the energy and materials producers.  In fact, this sector dropped more than 3% as crude oil and copper dropped the most in three weeks.

This decline in the markets is despite Bank of America’s (BAC) announcement that its net income from home refinancing and trading more than tripled in the first quarter.  This helped the bank and lender post a profit of $0.44/share, beating analysts’ expectations of $0.04/share.  However, the good news was unable to overshadow the rising charge-offs for uncollectable loans and sent the company’s stock price down 12.5% in morning trading. From a long-term perspective, the rising charge-offs is somewhat of a instigator, indicating that the financials are not out of the clear and far from a recovery, states Rita Nazareth of Bloomberg.

The Financial Select SPDR (XLF) was down 6.1% in intraday trading; BAC is 5.8%

News in the technology sector couldn’t even save the markets.  In a bold move, Oracle (ORCL) snapped up Sun Microsystems (JAVA) for roughly $9.50/share in cash, or $7.4 billion.  This is by far Oracle’s largest acquisition, and gives the tech giant access to the famous Java language and could potentially add up to 15 cents to share to its adjusted earnings in the first year after the deal closes, reports Michael Liedtke and Jordan Rovertson of the Associated Press.

Unfortunately, the news still couldn’t prevent the sector from going in the red, the Technology Select SPDR (XLK) was down about 3% in intraday trading, despite being up 10.8% for the year.  Oracle is 4.6% of the ETF.

On a positive note, the Baltic Dry Index rose to its highest level in almost a month on demand to transport iron ore to China and South America grains.  The index of commodity shipping costs jumped 3.3% to 1,737 points, indicating that there are parts of the globe that may be recovering from the economic downfall.

In the pharmaceutical world, GlaxoSmithKline (GSK) reached a deal to purchase privately held Stiefel Laboratories for a reported $2.9 billion in cash, assume the lab’s debt and make a performance-based payment of $300 million.  Despite this potential acquisition, shares of Glaxo dropped 1.7% and of the Pharmaceutical HOLDRs (PPH) dropped 1% in intraday trading.

Some other earnings to watch for out for this week are McDonalds (MCD), Apple (AAPL), Amgen (AMGN) and 3M (MMM). These results will continue to give a broader picture of our economy these days.

Kevin Grewal contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, 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.