Bank ETFs Bounce Back

Mild market gains eventually rolled down from Capitol Hill on Wednesday as Congressional leaders announced a compromise $789 billion financial stimulus package that seemed to sit well with investors. Meanwhile, America’s top bank CEOs spent the day testifying in front of the House Financial Service Committee. To read a complete rundown of the day’s trading action see our market report.

A day after financial ETFs stumbled on news of a Treasury Department bank rescue plan, those funds came roaring back on news of the stimulus. The insurance, banking and asset manager sectors posted gains, mostly on the back of soaring shares of Bank of America (BAC), Citigroup (C) and Genworth Financial (GNW).

The tech sector took its knocks after Research in Motion (RIMM) weighed in with a weak outlook.

The Dow Jones Industrial Average closed below 8,000 for the second straight day, adding 51 points for a nearly flat finish at 7,940.

Oil closed down $1.48 at $36.07 on a larger-than-expected inventory gain reported Wednesday by the Energy Department.

Buoyed by the bounce-back in financials, ETFs in the winner column included the RevenueShares Financials Sector fund (RWW), up 4.4%; Regional Bank HOLDRS (RKH), up 6.6%; and the leveraged ProShares Ultra Financials (UYG), which gained 8.0%.

Sizable gains from Norilsk Nickel (NILSY) pushed the Market Vectors Russia ETF (RSX) 3.3% higher Wednesday.

Falling crude prices bit into oil-focused ETFs, knocking the United States Oil fund (USO) back 3.1% and the iPath S&P GSCI Crude Oil fund (OIL) down 4.4%.

Launching Pad
State Street Global Advisors debuted the SPDR Barclays Capital Intermediate Term Credit Bond fund on the New York Stock Exchange. It charges an annual expense ratio of 0.15%.

Data Point
The SPDR Select Sector family of exchange-traded funds cut is average expense ratio from 0.23% to 0.21%, effective Jan. 31. SPDR funds carried an average expense ratio of 0.65% when they first launched 10 years ago.

Earnings and Conference Calls
ABB, Aetna, Baldwin Technology, BorgWarner, California Pizza Kitchen, Cephalon, Coca-Cola, Coinstar, the Knot, Laboratory Corp. of America, LightPath Technologies, Lufkin Industries, Mack-Cali Realty, Manulife Financial, Marriott International, Martin Marietta Materials, McAfee, NetGear, Panera Bread, Peet’s Coffee & Tea, Revlon, Rio Tinto, Total, Viacom, Vonage, Waste Management

Economic Data
8:30 a.m. Initial Jobless Claims
8:30 a.m. Jan. Producer Price Index
8:30 a.m. Jan. Producer Price Index, ex-Food & Energy
10:00 a,n, Jan. Conference Board Leading Indicators
10:00 a.m. Feb. Philadelphia Fed Business Index
10:00 a.m. DJ-BTMU Business Barometer

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