Banks lead Wallstreat lower

NEW YORK (Reuters) – Wall Street was on track to end the week lower on Friday as the rising cost of insuring Spanish debt against default increased worries about Europe’s financial health, sparking a selloff in financial stocks.

In early afternoon trading, the S&P 500 was down 1.4 percent for the week so far – a drop that would represent the benchmark index’s worst weekly percentage decline of the year – if the market closes at or near current levels.

The S&P financial sector index (REU:^GSPFI) fell 1.7 percent despite earnings from JPMorgan Chase & Co (NYS:JPM – News) and Wells Fargo & Co (NYS:WFC – News) that beat Wall Street’s expectations. JPMorgan shares slid 2.7 percent to $43.64. Wells Fargo shares fell 2.2 percent to $33.27.

“There are so many things playing into the decline today and although I am not turning bearish, I am telling our clients that they should take a more defensive stance,” said Randy Frederick, managing director of active trading and derivatives at Charles Schwab in Austin, Texas.