"While investors had been expecting some good news in the form of a mortgage settlement and the ability to put the issue in the past, this announcement suggests that investigations into banks' practices related to securitizing residential mortgages is unlikely to end any time soon, " KBW analysts wrote.

The SPDR Select Sector Financials ETF was down 0.6% Wednesday morning. Bank of America ( BAC), JPMorgan Chase ( JPM), Wells Fargo ( WFC) and Citigroup ( C), who are engaged in mortgage settlement negotiations, all saw their shares dip by more than 1% in early trading.

--Written by Shanthi Bharatwaj in New York

>To contact the writer of this article, click here: Shanthi Bharatwaj.

Readers Also Like:

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

If you liked this article you might like

Financials Trade Close to Flat as Investors Await Clarity From the Fed

Bank Stock Bulls Ready to Charge Again as Trump Bump Winds Down

Dow, S&P 500 and Nasdaq at New Records as Promise of Tax Reform Boosts Banks

Stocks Back at Highs as Apple Gains on iPhone 8, iPhone X Release

Stocks Come Off Highs as Apple Wait Counters Boost From Tax Reform Talk