Financial-sector-tracking ETF hits 10-year high

The largest exchange-traded fund to track the financial sector rallied on Monday and was at its highest level in more than a decade as investors cheered the weekend passage of the Senate version of a sweeping overhaul of the U.S. tax code. The Financial Select Sector SPDR ETF rose 1.7% and hit its highest level since October 2007. The fund was on track for its fifth straight daily gain, extending a recent period of outperformance. Over the past three months, the fund has gained 13.2%, making it the biggest gainer of any of the primary S&P 500 sector ETFs. Early Saturday, the Senate passed the Republican-sponsored tax reform proposal almost entirely along party lines. Hopes that the Trump administration and Republicans would usher in a business-friendly tax overhaul have been cited as a driver for the stock market’s record-setting streak over the past year, with financials seen as particular beneficiaries. The House and Senate now must agree on a single tax bill before it can be sent to Trump to sign. Among specific companies, Bank of America rose 3.7%, J.P. Morgan Chase & Co. was up 2.4%, and Wells Fargo & Co. climbed 2.6%. Among other financial-related ETFs, the SPDR S&P Regional Banking ETF surged 2.6% while the SPDR S&P Bank ETF was up 2.4%.

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