The KBW Bank Index fell 2.07% Wednesday amid continuing recession worries.
"For the past week, the market has been very concerned whether or not an economic rebound is actually happening," said Gary Townsend, the CEO of Hill-Townsend Capital LLC.
Though many economic reports in the past month have been encouraging, investors have been particularly worried that the unemployment rate hit 9.5% in June, Townsend said. On Thursday, the Labor Department is to release the latest weekly initial unemployment claims report.
On a more technical note, Townsend said, the S&P's 50-day moving average — 910 on Wednesday -— has probably peaked, meaning that the markets will most likely trend lower in the coming weeks.
Decliners Wednesday went across the board.
JPMorgan Chase & Co. fell 0.3%; Bank of America Corp., 2.6%; Wells Fargo & Co., 1.8%; PNC Financial Services Group Inc., 3.1%; U.S. Bancorp, 2%, and Citigroup Inc., 7 cents, to $2.62 a share.
Among the regional banking companies, SunTrust Banks Inc. was down 2.5%; BB&T Corp., 1.2%; Fifth Third Bancorp, 3.4%, and Huntington Bancshares Inc., 35 cents a share, to $3.40.
The Dow Jones industrial average spent most of the day in negative territory but rose in the last hour of trading to close up 0.18%. The Standard & Poor's 500 index fell 0.17%.