Bank stocks and sector-related exchange traded funds strengthened Friday as three major U.S. lenders helped pave the way for continued strength in the financial segment.
The Financial Select Sector SPDR (NYSEArca: XLF) rose 0.3% and the SPDR S&P Bank ETF (NYSEArca: KBE) gained 0.8% Friday.
Supporting market gains, shares of J.P. Morgan (NYSE: JPM), Bank of America (NYSE: BAC) and Wells Fargo (NYSE: WFC) advanced after the banks reported fourth quarter results. JPM rose 0.2% on better-than-expected Q4 results. BAC still managed to eke out a 0.3% rise despite revenue coming in below expectations. WFC also returned 0.9% even after a drop in the bank’s fourth quarter earnings.
XLF includes a hefty 10.7% tilt toward JPM, along with 8.6% WFC and 8.1% BAC. KBE, on the other hand, follows a more equal-weight indexing methodology and includes 2.3% JPM, 2.2% WFC and 2.3% BAC.
The financial sector strengthened after the three banks revealed strong quarterly profits and expressed optimism for the year ahead in the ir first public comments over earnings, reports Tanya Agrawal for Reuters.