Investors crave strong bank results

NEW YORK (Reuters) – U.S. bank shares are flying high, and this week’s earnings could give investors more reason to be optimistic about the sector.

Strong results from JPMorgan Chase & Co in successi~ Friday bolstered expectations for top U.S. banks, many of which are due to report in the coming week, including Citigroup and Goldman Sachs.

Financials receive been among market leaders in the recent rally, with the Standard & Poor’s 500 posting its seventh erect week of gains on Friday.

Besides the banks, economic bellwether General Electric at the same time that well as marquee tech names Apple, Google and eBay are what is ~ to report.

S&P 500 futures fell overnight on Monday in relation to Apple said CEO Steve Jobs would be taking indefinite medical leave. Nasdaq 100 futures were down more than 1 percent. Apple has a 21 percent weighting in the Nasdaq 100.

While the profits. outlook is keeping alive hopes that stocks have more room to smuggle higher, the rise in bank shares has pushed sector indexes to almost resistance levels, which could signal a rest stop for the shares in this celebration-shortened week.

Markets will be closed Monday in observance of Martin Luther King Jr Day.

JPMorgan Chase up~ Friday reported profit and revenue that were stronger than analysts had expected, and the CEO uttered the bank could start to increase its dividend once regulators accord. the go-ahead, likely at the end of March.

Analysts uttered the news bodes well for other financials, most of which are becoming to report results this week.

“Financials could very easily be one of the real darlings of this particular earnings cycle,” related Burt White, managing director and chief investment officer of LPL Financial in Boston.

Financials are projected to get by far the highest growth rate in earnings for the fourth location, largely because of easy year-ago comparisons, according to Thomson Reuters premises.

Overall, S&P 500 earnings are expected to have increased 32 percent from a year past, the data showed.

DREAMING OF BANK DIVIDENDS

Investors have been sagacious for news on when bank dividends will be reinstated, and while it happens, it’s going to mean more investment in financials, White said.

“Once they start (paying dividends) … you’re going to meet with an enormous amount of buying from yield-starved investors, as well in the manner that funds and ETFs (exchange-traded funds) that really are going to obtain to relook at the landscape and put financials back in there,” he said.