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HomeBusinessMarket extras: Bank ETF rebounds, set for best month since 2021

Market extras: Bank ETF rebounds, set for best month since 2021

Exchange-traded funds that bought bank stocks jumped on Tuesday as investors assessed the latest batch of second-quarter earnings results from Wall Street giants including Bank of America and Morgan Stanley.

The Invesco KBW Bank ETF KBWB, +3.05% closed up just over 3% on Tuesday, while the SPDR S&P Regional Banking ETF KRE, +4.22% , up 4.2%, according to FactSet data. Morgan Stanley MS,

+6.45% was among the top performers in the S&P 500 on Tuesday, even as its quarterly profit fell from a year earlier. fell, but its shares surged 6.5 percent after it reported earnings that topped expectations.

​“It was a busy morning with mixed results from Morgan Stanley and impressive results from Bank of America impression,” said Edward Moya, senior market analyst for the Americas at Oanda, in a note on Tuesday. ​“We’ve done work with most of the big banks and the overall conclusion is that despite the weak economy and all the turmoil caused by the regional banking crisis last quarter, they’re doing just fine.

The S&P Regional Bank ETF, which tracks an equal-weight index of U.S. regional bank stocks, had its best day on Tuesday since June 6, according to SPDR FactSet data. So far this month, the fund has soared 12 percent. %, on track for its strongest monthly performance since February 2021.

Bank stocks broadly outperformed the S&P 500 on Tuesday, helping lift a popular gauge of U.S. large-cap stocks. S&P 500 SPX Index

+0.71% closed up 0.7%.

Bank of America BAC, +4.42%

, reported better than expected Shares of the company rose 4.4 percent on Tuesday after the earnings, with Morgan Stanley one of the largest holdings in the market-cap-weighted Invesco KBW Bank ETF. As of July 17, JPMorgan Chase JPM, +0.18% , Wells Fargo WFC, +1.92% and Goldman Sachs Group GS +3.08% also ranks among the fund’s top holdings.

The Invesco KBW Bank ETF posted a gain from Biggest one-day gain since June 2, but the fund is still down double digits year-to-date.

Bank ETFs are picking up from regional bank failures earlier this year (including Silicon Valley Bank in March) The Invesco KBW Bank ETF is still down 15% this year as of Tuesday, while the SPDR S&P Regional Banking ETF is down just over 22% in 2023.

Meanwhile , the S&P 500 is up 18.6% year-to-date, driven by big tech stocks, including mega-company Apple Inc. AAPL, -0.13%, Microsoft Corporation MSFT,
and Nvidia Corp. NVDA, +2.22% , But there are signs that the rally is extending.

Fund focused on equal weight version of S&P 500 stocks, Invesco S&P 500 Equal Weight ETF RSP, + 0.62%, up 2.4%, so the month is far away. That’s similar to the gains in the market-cap-weighted S&P 500 , which has a heavy sway over the technology sector.

U.S. stocks generally closed higher on Tuesday, with the Dow Jones Industrial Average (DJIA) +1.06% Climbed 1.1%, Nasdaq Composite According to FactSet, +0.76%

rose 0.8%.



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