Pain continues for financial stocks

Even as the broader market rallied Friday, one group of stocks is still seeing an unusual amount of pain.

Financial stocks have been the second-worst performers this year, with the S&P 500 sector down more than 10 percent year to date. And out of 18 stocks that hit new 52-week lows on Thursday and Friday, 14 were financial names.

According to Larry McDonald, the outlook for these beleaguered stocks will remain grim, at least until commodities prices stabilize.

"The credit profile of the major commodity multinationals, the Anglo's, the Glencore's, the Petrobras', those big credits need to improve in order for the financials to improve from here throughout the year," McDonald, of Societe Generale, said Friday on CNBC's "Power Lunch," referring to a few big companies whose high debt levels have been seen as precarious.

Among those hitting new lows include Bank of America, Goldman Sachs and American Express, each of which reported fourth-quarter earnings this week.

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AmEx plunged 12 percent Friday after reporting earnings that missed analyst expectations.

Looking at the charts, Craig Johnson of Piper Jaffray said shares of the credit card giant look oversold, and may be set for a relief rally. However, with support coming in at $50, Johnson said he wouldn't necessarily recommend buying the stock at current prices.

"I'm not ready to step up and buy it yet. I want to see some sort of indication that it could start to turn higher," Johnson said Friday in a "Trading Nation" interview. "But a lot of the negative news looks priced in right now."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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