Just announced--BOA (I call them BAC, I speak in ticker talk) will pay back tarp by raising capital. The govt has approved them to do this, which is apparenly a large part of the process. If I recall, back when a number of banks repaid TARP few months ago, the ones that did so took action only after being govt approved to repay.
In any case, I'm posting this b/c IMO this is what has dragged on the financials, namely the banks for 1-2 months. Now if BOA is talking about raising 45 billion in capital, and plans to use equity markets to do so, you're looking at roughly 3 billion shares. Unlikely they do this entirely through a common stock offering though, and no word on exactly how that happens just yet.
This willl probably begin the domino effect that I suspected, and will slowly end the poor price action in banks and likely turn them higher once the threat of equity offerings are confirmed or denied, or complete.
I wont be trading this news, for BAC or any bank, but I suggest caution on the short side. Last time banks raised capital the typical dillutive effect was not enough to bring down stock prices or cause a selloff, other than short term drops. Also, I suspect some "pumping" will occur before JPM or GS raise capital, if they indeed proceed with offerings as well.
Semi high-five to Merideth Whitney, Uber Super Duper bear of self-titled analyst firm. She called this around a month ago, come to think of it, pretty close to the time that banks started to weaken as a group.