NEW YORK ( TheStreet) -- State Street ( STT) led the banking sector lower on a rough day for the broad market, with shares sliding 2.8% to close at $72.82.
The Boston-based custody bank and asset manager will announce its fourth-quarter earnings on Jan. 24, with analysts polled by Thomson Reuters on average estimating earnings of $1.19 a share, unchanged from the previous quarter but up from $1.11 a year earlier. Analysts estimate State Street's revenue will rise to $2.499 billion for the fourth quarter, from $2.469 billion in the third quarter and $2.463 billion during the fourth quarter of 2012.
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Bank stocks also took a pounding, with the KBW Bank Index ( I:BKX) ending 1.2% lower at 69.84, with all but two of the 24 index components showing losses.
The Department of Labor on Friday said the U.S. unemployment rate during December declined to 6.7% from 7.0% in November, but the improved unemployment rate was driven in large part by 0.2% decline in the labor participation rate to 62.8%. The labor participation rate declined 0.8% during 2013, with a large number of people have effectively been driven from the labor force.
The Labor Department said the U.S. economy added just 74,000 nonfarm jobs during December, a far cry from the consensus estimate of 192,000, among economists polled by Reuters.
Federal Reserve Bank of Atlanta president Dennis Lockhart in a speech on Monday said "the labor market is not as healthy as the improved unemployment rate might indicate. The unemployment rate drop may overstate progress achieved."
The 6.7% unemployment rate is a key figure, since the Federal Open Market Committee has repeatedly said it was unlikely to raise its target for the short-term federal funds rate until the unemployment rate drops below 6.5%. The federal funds rate has been held to a range of zero to 0.25% since late 2008.
Lockhart on Monday reiterated that the FOMC wouldn't change its policy for the federal funds rate until "well past" the achievement of the 6.5% unemployment rate.
But there are still some bright economic lights, according to Deutsche Bank chief economist Joseph LaVorgna. "Our best guess is that inclement weather dampened hiring by 100k last month and accounted for the one tenth drop in the nonfarm workweek to 34.5 hours. Following weather-related weakness in December 2005, nonfarm payrolls increased by +274k in January 2006."
LaVorgna in a note to clients late on Friday also wrote that the Federal Reserve's Flow of Funds report showed "a substantial improvement in household buying power," during the fourth quarter, with increased cash flow, consumer debt and rising home prices.
"When we combine the $399 billion gain in household cash flow with a $63 billion increase in consumer credit and a $2.2 trillion increase in homeowners' equity, we arrive at a $2.6 trillion increase in household buying power, which is the largest gain on record, surpassing that of 2012," he wrote.