A Good Day for Obama, Not for Banks

Barack Obama may have had a good day today as he became the 44th president of the United States.

For banks it was Crash Day.

Today was the worst day in modern history for bank stocks — with none equaling the evisceration of State Street Corp. State Street lost $9.3 billion of market capitalization today alone as its stock fell nearly 60% to $14.89 per share. As part of its quarterly earnings release, State Street announced that it had $1 billion of newly discovered credit exposures. Mainly, State Street provides banking services to Wall Street firms. (Click here for a transcript of State Street’s earnings call today.)

The Financial Select Sector SPDR, an ETF that tracks financial stocks in the S&P 500, fell almost 17%, matching its record one day percentage drop on Dec. 1, 2008, MarketWatch.com reported. The KBW Bank Index plummeted more than 19% today.

JPMorgan Chase, Wells Fargo & Co., Citigroup, and Bank of America all saw stock declines of more than 20% today. The Dow Jones Industrial Average fell more than 4% today — regardless of the Obama inauguration.