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March 11, 2010 Thursday 5:42 PM EST
SECTION: NEWS & COMMENTARY; Markets; Financial Stocks
LENGTH: 343 words
HEADLINE: Regional banks gain, Citi rallies
A previous version of this story gave the incorrect date of the Citi conference. It has been corrected.
SAN FRANCISCO (MarketWatch) — U.S. regional-bank shares added to weekly gains Thursday to close higher, while Citigroup Inc. advanced as investors cheered Chief Executive Vikram Pandit’s relatively upbeat outlook.
The gains in bank stocks helped the financial sector outperform the broader market. The Financial Select Sector SPDR Fund (XLF) , an exchange-traded fund that tracks the financial stocks in the S&P 500 Index ($SPX) , rose 0.8% compared with the broader index edged up 0.4%.
Shares of Huntington Bancshares Inc. (HBAN) added 2.9%, Fifth Third Bancorp (FITB) rose 2.5% and KeyCorp (KEY) rose 4.2%.
Regional banks had moved higher in the previous session after a report suggested Britain’s Barclays PLC (BCS) was hunting for a retail-bank acquisition. Also, several bank executives were speaking at a Citi investment conference in New York this week.
Citigroup (C) shares climbed 5.6% to $4.18 after Pandit said that the banking giant should be able to cover future credit losses in its troubled local consumer-lending business. There are “early signs of improvement” in the division, he remarked at the conference.
Pandit also mentioned that the U.S. government may sell its 27% stake in the company.
Shares of Citigroup have surged 19% this week, putting it on track for the best weekly gain since August 2009, and were bolstered by reports Wednesday that a sale of trust preferred securities had gone well. So far this year, the stock gained 26.3%.
The SPDR KBW Bank ETF (KBE) has benefited from the rally in Citi and other banks. That exchange-traded fund is up about 19% for the year to date, and is one of the best-performing ETFs in recent months.
Earlier this week, the KBW Bank ETF hit a fresh 52-week high. On Thursday, it rose as high as $25.31. Its next hurdle is $25.44, which it last traded in November 2008.
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