A 5% pullback in Goldman Sachs (NYSE: GS) on Thursday following downgrades from Wall Street analysts dusted up exchange traded funds that invest in the U.S. financial sector.
Dick Bove at Rochdale Securities cut Goldman shares to sell from neutral and lowered his target price on the stock to $120 a share.
“It now appears that the pressure on the Justice Department to bring a criminal lawsuit against Goldman is building to a high pitch,” according to the research note. “The new Matt Taibbi article in Rolling Stone Magazine is another all-out attack on the company. However, this time the attack is backed by a 650 page Senate report signed by both a Democrat and a Republican.”
Goldman Sachs has faced a backlash over its role in the financial crisis. In particular, the vaunted Wall Street firm is feeling heat over bonuses and a Senate panel report that blasted its behavior in the credit meltdown.
Separately, S&P Equity Research also downgraded Goldman to hold from buy, according to reports.
The largest financial-sector ETF was down nearly 1% in midday trading. Goldman is a top holding at more than 4% of assets.
Financial Select Sector SPDR Fund (NYSEArca: XLF)
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