Financial stocks continue to deteriorate this week with lingering concerns over Freddie Mac & Fannie Mae and continued weakness in regional banks following the collapse of IndyMac Bancorp.
The S&P 500 Financials sector is now at its lowest level since June 1997, as it has fallen over 9% this week. At the halfway point of July, the sector is now down nearly 15% this month and over 41% on the year.
With this type of performance, the Financials have seen their weighting drop dramatically in the market cap-weighted S&P 500 index. Earlier this year and for the first time since the tech bubble burst, Financials relinquished its top spot in the S&P 500 to Techs as the biggest sector in the index. Of note today, Healthcare passed Financials to become the third biggest sector (behind Techs and Energy) in the S&P 500.
Healthcare Passes Financials: Portfolio Weightings in S&P 500
- Techs 16.6%
- Energy 15.9%
- Healthcare 12.9%
- Financials 12.8%
- Consumer Staples 11.5%