Banks Shake Off Terror Threat

That selling had little to do with terror paranoia. Rather, the culprit was an NYSE plan to make it easier for investors to trade Big Board stocks electronically. Big Board officials were expected to unveil the proposal, which would cut into the profits of specialists firms, later in the day.

"I thought [financials] would have taken a bigger hit, but maybe the government gives people less credit than they deserve," says Michael Stead, a financial services portfolio manger with Wells Capital Management.

In fact, some traders may have been disappointed that the terror warning didn't spark more selling, in order to provide a buying opportunity in financials. Before the market opened, Ghriskey had predicted that any early selloff would probably bring bargain-hunters into the market by the afternoon.

Among other big financials, Merrill Lynch(MER Quote) fell 81 cents, or 1.6%, to $48.91; Bank of America(BAC Quote) lost 14 cents, or 0.2%, to $84.87; J.P. Morgan(JPM Quote) fell 29 cents, or 0.8%, to $37.04; Goldman Sachs(GS Quote) dropped 70 cents, or 0.8%, to $87.49; and Morgan Stanley(MWD Quote) dipped 56 cents, or 1.1%, to $48.77.