Bank stocks fell Friday as investors fretted over stagnant growth in Europe and a tightening of lending by China.

The KBW Bank Index was off 0.84%.

Domestic and global concerns weighed on the sector. A report showed that Europe's economy grew by just 0.1% in the fourth quarter as stagnation plagued the continent's most powerful economy, Germany. China said for the second time in a month that it had forced its banks to reduce lending.

In the U.S. Paul Volcker, the former head of the Federal Reserve and a key adviser to the Obama administration, told the Financial Times that his proposal for restrictions on bank activities could force large banks to surrender their bank charters if they want to continue proprietary trading.

Those news items overshadowed a Commerce Department report showing that retail sales grew in January by a better-than-expected 0.5%.

The Dow Jones industrial average fell 0.46%, and the S&P 500 index, 0.27%.

Most large and midsize U.S banking companies closed lower, including JPMorgan Chase & Co., off 0.18%; Bank of America Corp., 1.23%, and Wells Fargo & Co., 0.74%. Citigroup Inc. was unchanged, at $3.21 a share.

Among regional banking companies, Fifth Third Bancorp was down 2.27%; KeyCorp, 1.16%; U.S. Bancorp, 0.98%, and SunTrust Banks Inc., 0.49%.

PNC Financial Services Group Inc., meanwhile, rose 0.23%.

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