Financial exchange traded funds rose Thursday as strength in Citigroup (NYSE: C) and Bank of America (NYSE: BAC) helped lift the unloved sector.
Shares of Citi, B. of A. and Financial Select Sector SPDR Fund (NYSEArca: XLF) were all fractionally higher in premarket trading.
Citi shares are down about 10% since April 20, and are lagging the banking sector as investors focus on the company’s 10 for 1 reverse split.
“Pressure likely reflects some technical issues surrounding the split, concerns over lack of capital clarity, a so-so capital markets quarter (so far) and concern over a lack of expense flexibility,” Deutsche Bank said in a note Wednesday.
Yet the analysts said the recent sell-off in Citi “seems overdone,” citing valuation, management continuing to de-risk the company, and revenue that may accelerate a bit in the second half of 2011. They kept their buying rating on the stock.
The financial ETF is flat year to date.
Financial Select Sector SPDR Fund
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