While this should come as no surprise to anyone holding bank stocks, I find it interesting to note half of the losses in the S&P 500 index over the course of the past month can be attributed to the financial sector (XLF).
The chart below shows that while financials have fallen almost 21% during the last month, the other major industry sectors have come close to breaking even. Remove financials from the equation and only industrials (XLI) have lost 3% during this period.
The market is not healthy right now, but the collateral damage inflicted by financials on other sectors may have already peaked. This is not to say the market can rally without financials, but it is becoming increasingly difficult for the financial sector to drag the entire market down.
[source: AMEX, VIX and More]