The rate-sensitive bank stocks were hit hard by Friday's surprisingly strong employment report from the Labor Department, which showed payrolls gaining 705,000 jobs in February after a January loss of 201,000.

The Standard & Poor's bank index closed down 3.94%, amid a massive selloff in the market. The Standard & Poor's 500 fell 3.08%, and the Dow Jones industrial average declined 171.24 to 5470.45, a 3.04% drop.

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