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The U.S. banking sector followed European banks down, with shares of ING Groep (ING) sinking 13% to $7.49, while Deutsche Bank (DB) dropped 11% to $23.97, Credit Suisse (CS) was down 10% to $23.97, and UBS (UBS) was 8% to close at $11.70.The previous session's euphoria over the resignation plans of Italian Prime Minister Silvio Berlusconi was short-lived, with yields on 10-year Italian paper shooting up over 65 basis points to 7.42%, while the country's five-year bond yields jumped to 7.63%. One veteran bond trader called Wednesday's market action "the beginning of the great unraveling of the euro experiment," and described "a typical flight to U.S. Treasury paper, with proceeds derived from sovereign liquidations." The yield on 10-Year U.S. government bonds dipped below 2.00%. The Dow Jones Industrial Average was down nearly 400 points. The KBW Bank Index (I:BKX) declined 6% to close at 38.43, with the 24 index components showing declines of at least 3%.Shares of Citigroup (C) was down over 8% to close at $28.85. U.S. District Judge Jed S. Rakoff had scheduled a Wednesday hearing in Manhattan to grill Citigroup and Securities and Exchange Commission lawyers on the bank's agreement to settle securities fraud charges for $285 million. Goldman Sachs (GS) was also down over 8%, closing at $8.21, after reports that the investment bank was planning to sell part of its stake in in Industrial & Commercial Bank of China for $1.54 billion.Large U.S. banks seeing shares slide 7% on Wednesday included Bank of New York Mellon (BK), closing at $20.30; Huntington Bancshares (HBAN), at $5.12; JPMorgan Chase (JPM), $32.56; Regions Financial (RF), at $4.09; and SunTrust (STI), which closed at $18.79.Major U.S. banks seeing 6% declines on Wednesday included Bank of America (BAC), which was trading for $6.16; BB&T (BBT), Fifth Third Bancorp (FITB), at $11.73; KeyCorp (KEY), at $7.09; Northern Trust (NTRS), at $38.52; New York Community Bancorp (NYB), at $12.21; State Street (STT), at $39.43; and Wells Fargo (STI), closing at $24.99.RELATED STORIES: 5 Banks That Cannot Ignore Bank Transfer Day >How Wall Street Can Win Back Trust >Goldman Reportedly to Sell Stake in ICBC >Occupy Wall Street Actually in the 1% >MF Global 'Starting to Smell Like' Fraud: Ex-SEC >6 European Stocks Resistant to Debt Crisis >Fannie Mae Asks for $7.8B More From U.S. >-- To contact the writer, click here: Philip van Doorn.To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.
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