Bank shares slid Wednesday as investors exhibited concern about a potential dismantling of Citigroup Inc. and a change in control at Huntington Bancshares.
Citi's shares closed down more than 23%, and Huntington's shed more than 16%.
Meanwhile, the KBW Bank Index slid 6% as investors braced for earnings season.
The broader markets also fell after the Commerce Department reported that retail sales fell 2.7% in December, nearly double economists' expectation. It was the sixth consecutive month of declining sales.
Stocks remained depressed after the Federal Reserve's midafternoon release of its Beige Book, which provided more evidence that the economy had taken a dive at the end of last year. The Dow Jones Industrial average fell 2.9%, and the Standard & Poor's 500 index lost 3.4%.
Anthony Conroy, a managing director and head trader at BNY ConvergEx Group, said Citi's dilemma has created "a big question mark" over the entire sector.
Citigroup moved its earnings announcement forward from Jan. 22 to Friday, a day after announcing a plan to sell a 51% stake in Smith Barney to Morgan Stanley. (See
Huntington Bancshares Inc.'s stock price fell after the Columbus, Ohio, company named a new chairman, president, and chief executive. (See
Bank stocks declined across the board. JPMorgan Chase & Co., which was expected to reported earnings today, shed 1.7%. Bank of America Corp., which is to report Tuesday, fell 4.2%.
