Even experienced Wall Street contrarians are eyeing the beaten-down U.S. financial sector warily.
"The aversion to financials is great. Assets in bank-focused funds have dropped by 40 percent in the last six months, and the group is the only one of 10 S&P sectors trading at less than the value of the assets on their books.
"Market participants cite various reasons for financials to decline further, including regulations, weakness in the housing sector and fears linked to Europe's escalating debt crisis.
"Valuations are attractive, but there has to be a catalyst to move prices higher and I just don't see that," said Peter Coleman, director of research at JMP Securities in San Francisco."