Exchange traded funds (ETFs) that invest in U.S. financial and banking stocks were down more than 1% in early trading Monday after Standard & Poor’s lowered its ratings outlook on the U.S. on worries over the debt.

Top holding Citigroup (NYSE: C) erased early gains Monday after the bank reported quarterly earnings. Citi’s profit beat by a penny a share but revenue missed analyst forecasts, WSJ MarketBeat reported.

Financial and bank ETFs such as Financial Select Sector SPDR Fund (NYSEArca: XLF) fell last week on disappointing earnings from Bank of America (NYSE: BAC) and J.P. Morgan (NYSE: JPM).

The ETF traded lower Monday while the Dow shed over 200 points after S&P’s ratings move.

Headline risks such as a recent Senate-panel report blasting Goldman Sachs (NYSE: GS) and worries over the economy are also weighing on the sector funds.

Financial Select Sector SPDR Fund

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