A morning rally in bank stocks lost steam Monday, and the KBW Bank Index closed down 1.63%.

Raymond James & Associates analyst Anthony Polini wrote in a note Monday that a paring of bank stock gains was expected.

"Our industry average (comprising the nation's 40 largest banks and thrifts) has advanced nearly 25% over the past six weeks and appears to be due for a healthy round of profit-taking," Polini wrote.

Decliners included JPMorgan Chase & Co., off 1.5%; Bank of America Corp., 0.6%; Wells Fargo & Co., 2.2%; U.S. Bancorp, 2.5%; SunTrust Banks Inc., 2.8%, and Zions Bancorp., 3.6%.

PNC Financial Services Group Inc. fell 4.1%, after Sanford C. Bernstein & Co. analysts downgraded the Pittsburgh company's stock from "outperform" to "market perform."

Some gainers emerged, including M&T Bank Corp., up 0.7%, and Citigroup Inc., 12 cents a share, to $4.82.

The Dow Jones Industrial Average closed up 0.03%, and the Standard & Poor's 500 index fell 0.06%.

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