LOS ANGELES (AP) â¿¿ Stocks of large banks slid Friday amid lingering worries over the U.S. economy and the potential fallout from the European debt crisis.

Citigroup analyst Keith Horowitz lowered his target prices on a number of banks, saying that the uncertainty looming over the U.S. economy and European debt issues is unlikely to abate any time soon.

Fresh job data, even though improved from previous reports, was not enough to cheer investors.

The Labor Department reported that the U.S. economy added 103,000 jobs in September, an improvement from the month before, but the total includes 45,000 Verizon workers who were rehired after going on strike and were counted as job gains.

Set aside that technicality and the job gains still weren't enough to get the economy out of its soft patch, much less alleviate the unemployment rate, which remained stuck at 9.1 percent in September.

Banks overseas appear to be at an even greater risk. Fitch cut the credit ratings of both Spain and Italy, saying they are more likely to default because of the spreading debt crisis in Europe.

That followed action another ratings firm, Moody's, which downgraded several banks in the U.K.: government-controlled Royal Bank of Scotland, Lloyds TSB Bank, Spanish bank Santander's British business, and Nationwide Building Society.

Moody's said it believes that the British government will continue to provide some support to systemically important financial institutions, but is more likely to allow smaller institutions to fail.

European banks could bear the brunt of a default by economically week nations such as Greece, and U.S. banks would not be immune to the damage.

In a client note Friday, Citigroup's Horowitz raised his equity risk premium estimate for large U.S. banks to about 9 percent from 7.5 percent, a move that reflects a higher risk-return ratio for investors.

Horowitz also lowered his target prices for several banks, including Bank of America, to $9 from $10; Goldman Sachs Group Inc., to $125 from $140; JPMorgan Chase & Co., to $44 from $48; and Wells Fargo & Co. to $27 from $29.

The analyst said he favors the stocks of U.S. Bancorp among regional banks and JPMorgan Chase among the larger lenders.

He expects both banks to benefit from strong balance sheets and likely see a more significant return of capital to shareholders versus other banks next year.

Shares of U.S. Bancorp fell 62 cents, or 2.6 percent, to $23.38 in afternoon trading on Friday, while JPMorgan Chase shares slid $1.49, or 4.6 percent, to $30.89.

Elsewhere in the sector, Bank of America dropped 28 cents, or 4.4 percent to $6.01; BB&T Corp. was down 84 cents, 3.8 percent, to $21.04; Comerica Inc. slipped $1.29, or 5.2 percent, to $23.64; First Horizon National Corp. dropped 20 cents, or 3.2 percent, to $6.11; Goldman Sachs Group Inc. fell $4.79, or 4.9 percent, to $93.14; Wells Fargo slid 63 cents, or 2.4 percent, to $24.75; and, Morgan Stanley declined 80 cents, or 5.3 percent, to $14.38.

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