Whither Financials?

Can the S&P 500 pick up the pace in the fourth quarter with financial stocks stuck in neutral?

With only a few weeks remaining in the third quarter and the finish line for 2005 now in sight, the S&P index is barely in positive territory, up just under 2% for the year. The fact it has any gains at all is mostly a testament to the strength of energy and utility stocks, which have carried more than their puny 12% combined weight in the index.

By removing energy and utility shares from the mix, the extent to which the remaining seven sectors that compose the S&P have been dead weight becomes uncomfortably clear. The most obvious anchor has been the 2.5% drop in financial stocks. These issues make up the biggest share of the index at just under 20%, and typically they are the engine behind any widespread rally. ...