Bank stocks and the broader markets retreated Monday as investors gave back some gains from rallies last week.
The KBW Bank Index fell 2.54% on profit-taking, after rising 1.13% on Friday, traders said. The Dow Jones industrial average fell 2.13% and the Standard & Poor's 500 fell 2.38%.
Jack A. Ablin, the chief investment officer at Bank of Montreal's Harris Private Bank in Chicago, wrote in a note Monday that with the amount in short-term money market funds now equal to nearly half the value of the U.S. stock market, the market is poised for a bull run over the next several years.
"As long as the ranks of stock market sufferers haven't written off equities completely, this enormous stockpile could power the market's next leg up," Ablin wrote. "History has shown that whenever cash on the sidelines creeps to an amount greater than 25% of the capitalization of the S&P 500, the market tends to rally over the next two years as money filters in. These liquidity levels are a harbinger of bullish developments in stocks for the next couple of years."
Decliners were across the board. JPMorgan Chase & Co. fell 3.2%, Bank of America Corp. fell 2.8%, Wells Fargo & Co. fell 3%, PNC Financial Services Group Inc. fell 1.9% and U.S. Bancorp fell 4.1%.
Among the regionals, SunTrust Banks Inc. fell 2.2%, KeyCorp fell 2.8%, Fifth Third Bancorp fell 5.7%, M&T Bank Corp. fell 3.3%, BB&T Corp. fell 2.3% and Regions Financial Corp. fell 12 cents, to $4.33.
Huntington Bancshares Inc. rose 37 cents, to $4.52. On Friday, CNBC's Jim Cramer said the Columbus, Ohio, company's stock was the "best speculative" stock in the financial sector. Its shares have been down because of capital fears, Cramer said, but it has now raised more than $300 million in a secondary offering.