By MarketWatch
SAN FRANCISCO (MarketWatch) -- The U.S. financial sector was in the red Friday following a weaker-than-expected jobs report, while fears that Europe's debt crisis may spread next to Hungary rocked banks in that region.
The Financial Select Sector SPDR Fund (XLF 14.15, -0.59, -4.00%) closed down 4% after a highly anticipated nonfarm payrolls report for May disappointed markets. See full story on the jobs report.
Talk of derivatives losses at Societe Generale (SCGLY 7.37, -0.91, -10.99%) , France's second-largest bank, and worries over Hungary's economy also unsettled international markets. Read more on Europe's sovereign debt fears.
Societe Generale's American Depositary Shares retreated 11%,
U.S. financial stocks were facing across-the-board pressure Friday -- the heaviest decliners included Prudential Financial Inc. (PRU 55.66, -3.65, -6.15%) and Lincoln National Corp. (LNC 25.31, -1.97, -7.22%) .
Prudential shares lost 6.1%, while Lincoln National declined 7.2%.
Shares of heavyweights Citigroup Inc (C 3.79, -0.17, -4.29%) , JP Morgan & Chase Co. (JPM 37.62, -1.48, -3.79%) and Goldman Sachs Group Inc. (GS 142.25, -1.79, -1.24%) were also battered.
Citigroup lost 4.3% while JP Morgan declined 3.8%. Goldman Sachs retreated 1.2%.
Sandler O'Neill analyst Jeff Harte reduced the firm's second-quarter earnings estimate for Goldman Sachs to $2.96 a share from $4.62 a share. Sandler O'Neill also slashed its earnings estimate for Morgan Stanley (MS 25.99, -0.86, -3.20%) to 42 cents a share from 84 cents a share.
Morgan Stanley lost 3.2%.
Bank of New York Mellon Corp. (BK 26.00, -1.28, -4.69%) shares were off 4.7%. The company Friday priced a $700 million stock offering at $27 a share.
Real estate investment trusts suffered some of the biggest losses in the financial sector -- ProLogis (PLD 10.10, -0.84, -7.64%) and Kimco Realty Corp. (KIM 13.31, -1.10, -7.63%) both lost more than 7.6%.
