Exchange traded funds tracking the U.S. financial sector lost more than 3% Friday after a much weaker-than-expected employment market update for August. A report that big banks are facing potential lawsuits over mortgage-backed securities and worries over Bank of America (NYSE: BAC) added to the morning losses.
Financial Select Sector SPDR Fund (NYSEArca: XLF) was down 3.1% at last check.
The Labor Department said nonfarm payrolls were flat in August while the previous two months’ data were revised lower.
Separately, the Federal Housing Finance Agency is set to file lawsuits against more than a dozen big banks over their roles in packaging and marketing toxic mortgage securities, The New York Times reported.