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Banks’ losses outpace market plummet

Friday's market free fall was particularly tough on Wall Street, where large banks were impacted more.

Crane grabber dropping various dollar bills
Ryan Etter | Getty Images

Big banks' shares plummeted in a tumultuous trading session Friday, but one Wall Street analyst thinks stocks are oversold after a difficult start to 2016.

"I don't see what happened in 2007 happening again. Banks are much safer," said S&P Capital banking analyst Erik Oja. "They're definitely in an oversold position."

Citigroup, which posted earnings that topped analysts' expectations, saw shares drop the most Friday, losing more than 7 percent at the open and rebounding, slightly, to losses of more than 6 percent in mid-afternoon. The company's stock is down 18 percent to start 2016.

Morgan Stanley, which will report earnings on Tuesday, posted the losses greater than most banks' in the market decline, of 5 percent in the afternoon session. Morgan Stanley shares have fallen about 19 percent to begin the year.

Bank of America stock was off about 4 percent in mid-afternoon trading; the bank's stock is also down roughly 14 percent to begin 2016.

After revealing following Thursday's market close it would spend $5 billion settling various fines relating to mortgage lending violations that would suck $1.5 billion out of its fourth-quarter earnings, Goldman Sachs also outpaced the broader market in declines, losing about 4 percent in the mid-afternoon session. Goldman shares are down 14 percent to begin the year.

Relative outperformers on a disastrous day for markets include JPMorgan Chase, which topped earnings expectations in its report Thursday but fell about 3 percent in Friday trading, and US Bancorp, which reported earnings in line with expectations Friday morning. The banks are respectively down more than 14 percent and 9 percent to start 2016.