NEW YORK (CNNfn) - The U.S. banking sector took a hit during Friday's sell-off that analysts said reflected fears about global markets and corporate earnings.
Among the big losers were Citicorp (CCI), whose shares plummet 7-7/16 to 131-5/8 in mid-afternoon trading; Chase Manhattan Corp. (CMB), which shed 3-13/16 to 61-9/16; J.P. Morgan & Co. Inc. (JPM), off 4-1/2 at 118-5/16; and Bankers Trust Corp. (BT), which fell 5-3/4 to 95-1/2.
As U.S. markets in general reacted to global economic worries, banks were hit particularly hard because of their credit exposure in emerging markets.
"It's mainly concerns about economic weakness all over the globe and what it will do to the U.S.," said Michael Ancell, an analyst at Edward Jones. "The common refrain has been that the Asian crisis shouldn't have a big impact on the U.S. economy. Now with Russia's problems, people are reassessing that belief."
Rafael Soifer, an analyst at Brown Brothers Harriman, said that while fears about overseas markets are a factor, they're not commensurate with the level of declines banks experienced Friday, particularly because their exposure to Russia and Latin America is negligible.
"These companies are largely dependent on what's going on in the capital market," he said. "If there's a bad market, that will affect these companies."
Ancell pointed out that while the Federal Reserve once again elected to keep interest rates steady, several members continue to express concerns about inflation.
And while interest rates are at an all-time low, which should spark solid business for banks, Ancell said fears persists that the economy is headed for a slowdown.
"Long-term rates are below the federal fund rate," Ancell said. "That tells you the Fed's too tight. The reason the 30-year Treasury is so low is because people are expecting an economic slowdown, and that's not going to be good for earnings."
Other banks caught in Friday's crossfire included BankAmerica Corp. (BAC), which shed 2-5/16 to 77-13/16; First Chicago NBD Corp. (FCN), which fell 2-1/16 to 72-5/8; and BankBoston Corp. (BKB), which sank 2-7/16 to 41-15/16.