Bank Stocks Helped the Financial Index Rebound
Sharp rebound in stocks
Wall Street’s main indexes rebounded sharply last week after some economic data hinted that the US economy might not overheat, as expected earlier. The sharp rise in stock markets was mainly led by strong gains in financial and technology stocks. The NASDAQ Composite (COMP-INDEX) (QQQ) was the top gainer among the major indexes at 5.3%. NASDAQ finished the week at 7,239.47. The S&P 500 Index (SPX-INDEX) (SPY) surged 4.7% to 480.61. The Dow Jones Industrial Average (DJI-INDEX) (DIA) rose 4.3% and closed at 25,219.38.
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Bank shares soared
Bank shares soared last week due to expectations that higher inflation could support interest rates, which would ultimately boost banks’ earnings. The S&P 500 financial index surged 4.7% and closed the week at 480.61. Goldman Sachs (GS) was the biggest boost for the sector with a 7.4% gain. Wells Fargo (WFC) and Morgan Stanley (MS) added ~6.8% and 5.8%, respectively, while Bank of America (BAC) rose 5.4%. The Vanguard Financials ETF (VFH) and the Financial Select Sector SPDR ETF (XLF) also reported substantial gains of 4.8% and 4.7%, respectively.