Financial exchange traded funds led the way lower in stocks Tuesday as a surprise Greek referendum threatened the Eurozone bailout plan and fallout from MF Global’s bankruptcy filing weighed on banks.
SPDR S&P Bank ETF (NYSEArca: KBE) and Financial Select Sector SPDR (NYSEArca: XLF) lost nearly 5% as the Dow shed almost 300 points.
Greece Prime Minister George Papandreou unexpectedly called for a vote on an additional referendum to the newest bailout plan.
“The referendum is a bad idea with a bad timing. The post-summit rally is over,” Lionel Jardin, head of institutional sales at Assya Capital, said in a Reuters report.
“Announcing something like this only days after the summit without consulting other Eurozone members is irresponsible,” Slovak Finance Minister Ivan Miklos said in the same report.
Shares of U.S. banks with exposure to European debt are falling. MF Global Holdings filed for bankruptcy protection Monday – the company had a highly-leveraged $6.3 billion exposure to European debt, according to MarketWatch. [Financial ETFs Down After MF Global Files for Bankruptcy]