While the markets are all in the green for the last five days, the big banks are decidedly in the red, including our hero, Citigroup (NYSE:C): down an unhappy 2.17%.

The market is still digesting a bit of bad news for Citi, but that doesn't explain the sector being down as a whole. So, what gives?

Tale of the tickers
Before we take a crack at answering that, here's a quick overview of where Citi's peers and the markets are shaking out for the last five days:

  • Bank of America (NYSE:BAC) is down 3.56%.
  • JPMorgan Chase is down 2.29%.
  • Wells Fargo is our best performer here, down only 0.79%.

The market is doing better, if not exactly going gangbusters, with the narrower Dow Jones Industrial Average up 0.61%, the broader S&P 500 up 0.94%, and the Nasdaq up 0.74%.

Bad news comes in twos
The bad news for Citi I referenced earlier is twofold. First, just last week, the superbank announced it was settling a $730 million investor lawsuit for "misstatements and omissions in the company's disclosures" for shares purchased between May 11, 2006 and November 28, 2008. 

The second item is an "enforcement action" taken against Citi by the Federal Reserve for "breakdowns in money-laundering controls." In particular, the enforcement action has to do with Citi and one of its subsidiaries, the Mexico-based Banamex. The Fed cited a "failure to monitor cash transactions for potentially suspicious activity."  

According to The New York Times, no fines were levied, and neither Citigroup nor Banamex admitted to any wrongdoing. 

Foolish bottom line
As regards the investor lawsuit, this is more financial-crisis baggage. And while $730 million is in no way a threat to the superbank's operations, it still brings back unpleasant memories and leaves investors wondering what's left to come.

B of A recently agreed to pay Fannie Mae $10 billion for bad mortgages it sold to the housing giant during the real-estate boom. Citi's home-loan transgressions never reached B of A's staggering proportions, but they were staggering enough to warrant the creation of a "bad bank" to hold said toxic mortgage debt.

As for the money-laundering action, at least no fines were levied, but this is another kind of thing that investors get tired of hearing about: sloppy controls at best, or outright bad behavior at worst. So it's possible the market is still just digesting these two Citi news items, potentially explaining its poor performance over the last five days.

But all of the banks are doing poorly. What explains that? How about stress-test hangover?

The Fed's 2013 Comprehensive Capital Analysis and Review was a highly anticipated event for all bank investors. It could be that those weeks of waiting for the initial results, and then the results that would reveal whether each bank could proceed with its proposed capital actions, left investors and the markets exhausted.

Of course, the dismal performance of Citi and its peers could just be due to the capricious, invisible hand of the market slapping the sector around this week. We all know that -- in the short term -- share prices of our favorite companies will regularly go up and down. But as Foolish investors, we keep our eye on the long term, with its -- hopefully -- steady, reliable upward slope of growth and performance.

The bottom line? As long as the companies you're invested in have solid fundamentals, and you still believe in their products and corporate mission, your money is in the right place. Weeks like this are just another reminder that we really don't need to watch the markets, or our individual stocks, every day. Relax, and maybe watch a good movie instead.