Bank stocks fell more than 3.6% on Monday, buckling under fresh economic news of rising home sales in July and possibly higher interest rates as a result.

The Commerce Department reported that new-home sales in July rose 0.1% to a seasonally adjusted annual rate of 980,000 units. This was stronger than the 2.6% drop expected by a consensus of economists. Also taking economists by surprise was an upward revision of June home sales, to a yearly rate of 979,000 units, up 7.3% from May.

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