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With new signs emerging about the sluggishness spreading through the

economy

and traders steering clear of equities ahead of the House of Representatives' upcoming vote on the

bailout

proposal, financial stocks sold off Thursday.

The KBW Bank Index lost 3.2%, and the NYSE Financial Sector index fell 4.5%. The Amex Securities Broker/Dealer index was worse by 5.2%.

Insurers were particularly hard hit after Senate Majority Leader Harry Reid (D-Nev.), said a well-known insurance company could be near bankruptcy. His comments were later retracted.

Still, stocks in the group were hit hard.

MetLife

(MET) - Get Free Report

sank 15% to $40.96,

Travelers

(TRV) - Get Free Report

fell 6% to $40.47, and

Hartford

(HIG) - Get Free Report

plunged 32% to $25.91.

Among banks,

Citigroup

(C) - Get Free Report

lost 2.2%, and

Bank of America

(BAC) - Get Free Report

shed 4.6%.

Goldman Sachs

(GS) - Get Free Report

and

Morgan Stanley

(MS) - Get Free Report

were also weaker.

JPMorgan Chase

(JPM) - Get Free Report

avoided the selloff, tacking on 1.2%.

Wachovia

(WB) - Get Free Report

, whose banking operations are being sold to JPMorgan, advanced 10% to $3.91.

BB&T

(BBT) - Get Free Report

and

Wells Fargo

(WFC) - Get Free Report

surrendered more than 4%.

This article was written by a staff member of TheStreet.com.