Financial exchange traded funds led the market lower Friday on speculation France and other European countries will finally be downgraded by Standard & Poor’s. An earnings miss by JP Morgan (NYSE: JPM) also fueled the selling.
Financial Select Sector SPDR (NYSEArca: XLF) fell about 2% in recent action. The sector ETF is encountering resistance at its 200-day simple moving average.
“Standard & Poor’s is set to downgrade the credit ratings of several euro zone countries later on Friday, but not those of Germany and the Netherlands, a senior euro zone government source said,” Reuters reported Friday morning.
Separately, JP Morgan shares slipped 4% after the banking giant said fourth-quarter profit declined 23%. [S&P’s ETF Picks for Regional Banks]
“As the first major bank to report for the fourth quarter, JP Morgan’s results offer a glimpse into what is largely expected to again be a bleak quarter for the nation’s largest financial institutions,” Dow Jones Newswires reported.
JP Morgan is the second-largest holding in the financial ETF at 8.4% of the portfolio. The fund lost 17% last year.
Financial Select Sector SPDR
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