US financial sector drops sharply as market plunges, recovery not as robust as broader market

Sector Wrap: Financial stocks feel market’s pain

NEW YORK — Shares of financial stocks fell as much 13 percent Thursday as the broader market nosedived.

The Standard & Poor’s Financials index dropped as low as 196.55 during the session, before recovering to close at 205.69

The Dow Jones industrial average was down throughout the day, but plunged nearly 1,000 points in afternoon trading as fears accelerated that Greece’s debt woes could hinder a global economic recovery.

There also were reports that a technical glitch hastened the selling that led to the dramatic drop.

The Dow, the most-watched market barometer, rebounded to close down 347, 3.2 percent, at 10,520. The Nasdaq composite index dropped 3.4 percent, ending at 2,319.64, while the S&P 500 index gave up 3.2 percent to close at 1,128.15.

U.S. financial stocks regained some of their lost ground but did not recover as much as other market sectors. Some market observers said the problems in Europe have sparked worries that U.S. credit markets, still struggling to regain strength, could seize up again.

Among the most volatile issues in the S&P Financials index:

Insurer Metlife Inc. dropped as much as 13 percent before recovering to end down $1.74, or 4 percent, at $42.15.

Retail-focused real estate investment trust Simon Property Group Inc. dropped nearly 11 percent before turning back to end down $3.60, or 4.1 percent, at $84.88.

Asset manager Franklin Resources Inc. also tumbled 11 percent before rebounding to end down $5.24, or 4.7 percent, at $107.19.

Wells Fargo & Co. gave up as much as 10.3 percent before regaining some ground to close down $1.48, or 4.5 percent, at $31.18.