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Financial Select Sector SPDR Roars Back as Markets Recover

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The Financial Select Sector SPDR (XLF) rose more than 5.7% on Monday, May 10, to beat the performance of the S&P 500 and the Dow.

The Financial Select Sector SPDR (XLF) rose more than 5.7% to 15.96 on above-average volume Monday, as the markets reacting warmly to news of a $1 trillion rescue plan for the euro.

The financial sector’s rebound topped that of the S&P 500, which increased about 4.4% to 1,159, and the Dow Jones Industrial Average, which rose about 3.9% to end the day at 10,787.

The highest performers of the day included the European banks, such as Barclays (BCS), Deutsche Bank (DB) and UBS (UBS) – they rose roughly 18%, 11% and 8% respectively.

Insurers and retirement specialists did well, too. Assured Guaranty (AGO) and Genworth Financial (GNW) both ticked up nearly 13%, while Prudential Financial about 7%.

In the broker-dealer arena, Ameriprise Financial (AMP) moved up more than 7%.

Bank of America (BAC) and Wells Fargo (WFC) improved 7%, as Morgan Stanley (MS) moved up roughly 4%. Both TD Ameritrade (AMTD) and Charles Schwab (SCHW) rose more than 4.5%.

On the downside, credit-rater Moody’s (MC) dropped nearly 7% on news that the SEC may take enforcement action against it.

The Financial Select Sector SPDR is trading at about the levels it reached in early March, before it moved up to roughly 17 in mid-April, its 52-week high. Its 52-week low is just under 11. In the past three months, XLF has outpaced the Dow and S&P with a 10% return.