Banking stocks are extending a recent downward move in late morning trading on Wednesday, with the continued weakness in the sector reflecting renewed concerns about the economic outlook following another batch of disappointing data.
The weakness among banking stocks is reflected by the 1.3 percent loss being shown by the Kbw Bank Index. At its low for the session, the index was at its worst intraday level in almost eight months.
Reports showing much weaker than expected durable goods orders growth and a substantial drop in new home sales have contributed to the weakness in the sector.
Before the start of trading, the Commerce Department released a report showing that durable goods orders edged up by 0.3 percent in July following a revised 0.1 percent decrease in June. Economists had expected orders to surge up by 3.0 percent.
Excluding a 13.1 percent increase in orders for transportation equipment, durable goods orders actually fell by 3.8 percent in July compared to a revised 0.2 percent increase in the previous month. Ex-transportation orders had been expected to increase by 0.5 percent.
In a separate report, the Commerce Department said that new home sales plunged by 12.4 percent to an annual rate of 276,000 in July from the revised June rate of 315,000. With the decrease, new home sales fell to their lowest level on records dating back to 1963.
The decrease came as a surprise to economists, who had expected sales to edge up to 334,000 from the 330,000 originally reported for the previous month.
Synovus Financial (SNV) is turning in one of the banking sector's worst performances, with the financial services provider currently down by 6 percent. Earlier in the session, shares of Synovus fell to an eight-month intraday low.
SunTrust Banks (STI) and Marshall & Ilsley (MI) are also posting notable losses, falling by 2.3 percent and 2.4 percent, respectively.
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