Bank ETFs Gain Ahead of Stress Test Data

Investors on Monday made bets on the notion that the results of Treasury Department's stress tests on 19 embattled banks would be not as bad as feared. The official results were released to banks Monday, but won't be disclosed to the public until later this week. Stocks and exchange-traded funds responded to renewed enthusiasm in the market, pushing up shares of financial, energy and emerging market ETFs. The Dow Jones Industrial Average rose 214 points to close at 8426. For a complete rundown on Monday’s trading session see our market story. 

The SPDR KBW Bank fund (KBE) rallied sharply, gaining 14.5%, closely followed by the Regional Bank HOLDRS (RKH), which rose 14.7%. A string of strong profits in its holdings and anticipated increases in global demand pushed up the Market Vectors Coal fund (KOL) by 12.3%.

The iPath S&P 500 VIX Short-Term Futures fund (VXX) slipped 5.3% on Monday's big market swing.

Data Point
In the largest shuttering of exchange-traded funds this year, PowerShares will close 19 of its ETFs on May 18. Many of the funds tracked Research Affiliates Indexes created by Robert Arnott. The company, which still has 150 ETFs or ETNs, said many closing funds failed to get enough market interest. PowerShares said the doomed funds represent less than 1% of their ETF assets under management. Shareholders can sell the shares before the funds close or await a distribution based on their value as of May 22. The funds to be closed are as follows: PowerShares Dynamic Aggressive Growth Portfolio (PGZ), PowerShares Dynamic Asia Pacific Portfolio (PUA), PowerShares Dynamic Deep Value Portfolio (PVM), PowerShares Dynamic Europe Portfolio (PEH), PowerShares Dynamic Hardware & Consumer Electronics Portfolio (PHW), PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio (PDQ), PowerShares FTSE RAFI Basic Materials Sector Portfolio (PRFM), PowerShares FTSE RAFI Consumer Goods Sector Portfolio (PRFG), PowerShares FTSE RAFI Consumer Services Sector Portfolio (PRFS), PowerShares FTSE RAFI Energy Sector Portfolio (PRFE), PowerShares FTSE RAFI Europe Small-Mid Portfolio (PWD), PowerShares FTSE RAFI Financials Sector Portfolio (PRFF), PowerShares FTSE RAFI Health Care Sector Portfolio (PRFH), PowerShares FTSE RAFI Industrials Sector Portfolio (PRFN) PowerShares FTSE RAFI International Real Estate Portfolio (PRY), PowerShares FTSE RAFI Telecommunications & Technology Sector Portfolio (PRFQ), PowerShares FTSE RAFI Utilities Sector Portfolio (PRFU), PowerShares High Growth Rate Dividend Achievers Portfolio (PHJ) PowerShares International Listed Private Equity Portfolio (PFP).

Launching Pad
Grail Advisors on Monday launched the Grail American Beacon Large Cap Value fund (GVT), its first foray into actively managed exchange-traded funds. The new fund seeks to beat the Russell 1000 Index, though it will not track specific benchmarks. The fund initially launched with 152 stocks, with the largest single positions in: Chevron (1.52%); JPMorgan Chase (1.50%); ConocoPhillips (1.46%); Phillip Morris (1.43%) and AT&T (1.42%). It has an expense ratio of 0.79%.

Earnings and Conference Calls
Alcatel Lucent, Allied Healthcare, Archer Daniels Midland, Avon, Cephalon, CVS Caremark, Denny's, Diebold, Duane Reade, Duke Energy, El Paso Electric, Electronic Arts, Emerson Electric, GMAC, Harte-Hanks, Healthsouth, Hewitt Associates, Kinross Gold, Legg Mason, Liberty Mutual, Molson Coors Brewing, Penske Automotive Group, Pitney Bowes, Pulte Homes, Steven Madden, Stone Energy, Teva Pharmaceutical, True Religion Apparel, UBS, WebMD Health, Wynn Resorts

Economic Data
7:45 a.m. ICSC Chain Store Sales
8:55 a.m. Redbook Retail Sales
10:00 a.m. March ISM Non-Manufacturing Index
4:30 p.m. API Oil Industry Report
5:00 p.m. ABC/Washington Post Consumer Confidence

A look at how the industry's most popular ETFs did on Monday.