Financial ETFs Up on Rosier Bank Outlook

Financial stocks led a rally Monday that resulted in a triple-digit gain for the Dow ahead of major earnings reports. The Financial Select Sector SPDR fund (XLF) was among the most heavily-traded tickers, closing up 6.4%.

Major indexes broke out of a see-saw morning after influential bank analyst Meredith Whitney upgraded Goldman Sachs (GS) to a Buy and said Bank of America (BAC) shares looked cheap relative to the company’s tangible book value. Goldman reports Tuesday before the open. Other Dow components, including Citigroup (C), JPMorgan Chase (JPM), Johnson & Johnson (JNJ), General Electric (GE), Intel (INTC) and IBM (IBM), are also scheduled to release earnings report this week.

The Dow Jones Industrial Average closed up 185 at 8332. The Nasdaq rose 37 points to 1793 and the S&P 500 climbed 22 at 902, its highest close in two weeks.

For a detailed rundown on Monday’s trading session see our market story.

The Regional Bank HOLDRS fund (RKH) was ahead of the pack Monday, gaining 6.6%. The SPDR KBW Bank (KBE) also had a strong showing, rising 6.4%.

The iPath S&P 500 VIX Short-Term Futures fund (VXX) dropped 3.6% when the index was caught in the financials-fueled upswing. The iShares MSCI South Korea Index Fund (EWY) slipped 2.6% following a report that North Korean leader Kim Jong Il has cancer, news that could increase the potential instability in the region. South Korea's currency, the won, and the Kospi stock index each recorded their largest losses since March.

Earnings and Conference Calls
Altera, Goldman Sachs, Intel, Johnson & Johnson, Levi Strauss, Ocean Power Technologies, Yum Brands

Economic Data
7:45 a.m. ICSC Chain Store Sales Index for July 11
8:30 a.m. June Producer Price Index
8:30 p.m. June Producer Price Index, ex-food & energy
8:30 a.m. June Retail Sales
8:30 a.m. June Retail Sales, ex-autos
8:55 p.m. Redbook Retail Sales Index for July 11
10:00 a.m. May Business Inventories
5:00 p.m. ABC/Washington Post Consumer Confidence for July 11

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