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) sank 15% to $40.96, Travelers ( TRV) fell 6% to $40.47, and Hartford ( HIG) plunged 32% to $25.91.

Among banks, Citigroup ( C) lost 2.2%, and Bank of America ( BAC) shed 4.6%. Goldman Sachs ( GS) and Morgan Stanley ( MS) were also weaker. JPMorgan Chase ( JPM) avoided the selloff, tacking on 1.2%.

Wachovia ( WB), whose banking operations are being sold to JPMorgan, advanced 10% to $3.91. BB&T ( BBT) and Wells Fargo ( WFC) surrendered more than 4%.
This article was written by a staff member of TheStreet.com.