Bank stocks traded in a narrow range of gains and losses Monday morning, but profit-takers pushed financials into the red during afternoon trading.

The KBW Bank Index finished the day down 3.3% after producing a 0.3% gain over the course of last week.

"There was a downdraft on financials in general," Tim Curran, a bank stock trader at Regions Financial Corp.'s Morgan Keegan & Co., said in an interview Monday. "There were exceptions, of course, but for the most part the big banks and the regionals were down."

Several banking companies hit by downgrades Friday from Standard & Poor's Corp. on lost stock value Monday. Wells Fargo & Co. shed 6.6%, Citigroup Inc. lost 3.9%, and Bank of America Corp. lost 2%.

Other notable decliners included KeyCorp, which lose 7.3%; State Street Corp., which lost 6.3%; U.S. Bancorp, which lost 5.2%; and Columbia Banking System Inc. of Tacoma, which lost 2.9%.

Gainers included Regions, which rose 1.6%, and Sterling Financial Corp. of Spokane, which rose 2.9%

The broader market, hurt by another round of news from the auto industry, also lost ground. The Dow Jones industrial average fell 0.7%, and the S&P 500 lost 1.8%. Toyota Motor Corp. warned that it could post an operating loss for the fiscal year that will end in March; it would be the automaker's first-ever full-year operating loss.

Analysts said bargain hunters might return to the market to round out their portfolios before the end of the holiday-shortened trading week.

But many market observers expect bank stocks to remain under pressure until after investors can absorb and make sense of fourth-quarter reports next month.

"And that's not going to be a pretty process," Gerard S. Cassidy, an analyst at Royal Bank of Canada's RBC Capital Markets, said in an interview Monday. "We expect the fourth quarter of this year to be the mother of all kitchen-sink quarters for the banks."

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