Financial Sector ETFs Lead Market After J.P. Morgan Earnings Beat

Financial stocks and sector-related exchange traded funds rallied Thursday and pushed the broader S&P 500 and Dow Jones Industrial Average to new highs as J.P. Morgan’s (NYSE: JPM) earnings beat helped set the pace for second quarter expectations.

JPM shares rose 1.8% Thursday after revealing a much better-than-expected increase in second quarter revenue. Excluding accounting adjustment and legal benefit, earnings were $1.55 per share or 12 cents higher-than-expectations. Revenue also climbed to $25.2 billion, compared to estimates of a $24.2 billion average, the Wall Street Journal reports.

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“We saw strong underlying performance with record consumer deposits, credit-card sales volume, merchant processing volume and broad core loan growth” fueled by mortgages and commercial real estate, Chief Executive Officer Jamie Dimon said in a statement.

The earnings beat helped financials outperform other S&P 500 sectors Thursday, with the Financial Select Sector SPDR (NYSEArca: XLF) up 0.8% and the sub-sector-specific SPDR S&P Bank ETF (NYSEArca: KBE) up 1.6% – KBE also popped back above its 200-day simple moving average. JPM makes up 2.5% of KBE’s underlying portfolio and 7.9% of XLF.