Bank stocks and the broader markets fell Tuesday on light trading during the holiday week. The KBW Bank Index was off 2%, the Dow Jones industrial average 1.18%, and the Standard & Poor's 500 index 0.97%.

"The entire market is trading at a very low volume, so strange things can happen" when even expected economic news or downgrades for certain companies can cause large movements in stocks, said Cassandra Toroian, the president and chief investment officer of Bell Rock Capital LLC in Rehoboth, Del.

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