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]