Were Yesterday's Losses in Financials the Start of the Correction?

I bet we can all think of a better way to kick off the 4th quarter than a big 200 point drop for the Dow Industrials. We've all heard the bears declare the end is near for the Cash for Clunker Stock Rally. So, is this the end?

Looking around at the Clunker stocks, we they outperformed on the downside yesterday. Bank of America (NYSE:BAC) lost 4%, Citigroup (NYSE:C) dropped 6% and AIG (NYSE:AIG) fell 7%. Wells Fargo (NYSE:WFC) was down 5%.

CIT Group (NYSE:CIT) was hammered for 45% on Wednesday after it said bankruptcy is still a possibility for the troubled company.

Overall, the banking sector, as measured by the Financial Sector ETF (XLF), fell 4.6%. And the UltraShort Financials Inverse ETF rallied nearly 10% since Wednesday's close.

Of course, we might expect financials to bear the brunt of any selling. What about some of the other measures of economic health...like oil?

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