US Financial Stocks Tumble As Investor Sentiments Weaken

All leading US financial companies dipped today as investor sentiments frayed over weak economic data from China and a dip in consumer confidence index in the US. The Financial Select Sector SPDR exchange-traded fund, which tracks the financial stocks in the S&P 500 Index, lost 3.24% at 3:33 pm EDT. The biggest decliner in the sector was Janus Capital Group Inc

, which slipped more than 7% after analysts at Keefe Bruyette & Woods slashed their rating for the company from “outperform” to “market perform.” The financial sector was also hit by remarks made by analysts at Goldman Sachs that earnings of big banks can take a beating of up to 13% as a result of the legislation on the financial reform, which is awaiting final votes on Capitol Hill. Analysts at Stifel Nicolaus backed the analysis and slashed their normalized earnings estimates for several banks including Bank of America

, whose estimates were lowered by 9.9%. Stifel Nicolaus remarked that the cuts don’t yet take into account several aspects of the new regulation. Following the cut in estimates, shares of several large banks are down, with Citigroup Inc

suffering the most with shares retreating almost 7%. BAC, JP Morgan Chase & Co

and Wells Fargo & Co

are also deep in the red.