Bank stocks have rallied for the last four weeks, but some analysts said investors are missing warning signs of trouble in store.
Economic uncertainty, declining asset quality, and high stock prices have the potential to douse enthusiasm for the financial sector. Rising 7.83% in the past four weeks, the American Banker index of 225 banks was virtually flat Friday, dipping 0.02%, and its index of the top 50 banks rose 0.75% even as the broader market sold off. The Standard & Poors 500 index fell 1.89% Friday and is down 3.05% for the last four weeks. The Nasdaq composite lost 5% on weakness in technology shares. An attack on Iraq by U.S. warplanes Friday may have contributed to the slide.