Even experienced Wall Street contrarians are eyeing the beaten-down U.S. financial sector warily.
The sector is down 20 percent this year, by far the worst performer in the S&P 500. The weakness has been so pervasive that the S&P, which is down 1.8 percent in 2011, would be up 3.3 percent on the year if financials were excluded, according to Standard & Poor's Equity Research.
Most market participants agree these stocks are set for a rebound over the long term. They still appear too risky for short-term traders.
Arguably, this is when intrepid bargain hunters who buy into investor fear would be snapping up the beaten-down sector. But the problems dogging banks all year – from the debt crisis in Europe to the bleak outlook for profits – do not appear to be abating.
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