Banks, brokers and insurance companies make up almost 17% of
the S&P 500, almost twice the level from 2009 and closing in on technology
companies at 17.6% as of the end of July 2013.
Banks were the biggest American industry during the bull market that
began in 2002, when the S&P 500 more than doubled and the
economy expanded as much as 3.5% annually. In the late 1990s, financial
firms grew to almost 19% of the index, coinciding with the largest stock
rally in U.S. history and more than 4% average annual growth in gross
domestic product (GDP).
The last time financial shares were the largest group in the
S&P 500 was May 2008, four months before Lehman Brothers Holdings Inc.
filed the largest bankruptcy in U.S. history. It took more than $2
trillion of credit-related losses and write downs, after risky trading and home
lending led to the credit crisis. About $11 trillion vanished
from U.S. equity market value in the following year and a half.
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