“In the past week, two prominent analysts have said they expect hundreds more small bank failures in the second half of this year. At the same time, the Financial Select Sector SPDR ETF, a fund that tracks top U.S. banking institutions, has risen to a year-to-date high. But at what point will the number of regional bank bankruptcies drag on the performance of the bulge bracket institutions,” Daniel M. Harrison Reports From BNET.

“The answer may be never. More unfortunately still, judging by the numbers, it seems that small bank failures are actually propelling both earnings and investor appetite for the big banks,” Harrison Reports.

“Richard Bove, vice president of equity research at Rochdale Securities and one of Wall Street’s most influential analysts, said last week that he expects an additional 150 to 200 bank failures in the next 12 months. Meredith Whitney, another celebrity analyst, foresees up to 300 casualties of the subprime crisis. Given that just 106 banks have been shut down by regulators so far, those figures hardly make for encouraging reading,” Harrison Reports.

Full Story: HERE

The investment (XLF) includes companies from the following industries: banks, diversified financials, insurance and real estate. The fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. This fund has adopted a policy that requires it to provide shareholders with at least 60 days notice prior to any significant material change in its policy or its underlying index. It is nondiversified.

TOP 10 HOLDINGS (XLF) ( 55.02% OF TOTAL ASSETS)

Company Symbol % Assets AMER EXPRESS INC (AXP) 2.68 BK OF AMERICA CP (BAC) 7.93 BANK OF NY MELLON CP (BK) 2.94 GOLDMAN SACHS GRP (GS) 6.68 JP MORGAN CHASE CO (JPM) 12.75 METLIFE INC (MET) 2.37 MORGAN STANLEY (MS) 3.4 THE TRAVELERS CO (TRV) 2.19 US BANCORP (USB) 3.34 WELLS FARGO & CO NEW (WFC) 10.74

 

The investment (KRE) seeks to replicate the total return performance, before expenses, of the KBW Regional Banking index. The fund uses a passive management strategy designed to track the total return performance of the KBW Regional Banking index. The index is a float adjusted modified-market capitalization weighted index of geographically diverse companies representing mortgage banks, loan processors, marketing and service institutions listed on U.S. stock markets. As of September 30, 2007, the Regional Banking index was comprised of 50 stocks. It is nondiversified.

TOP 10 HOLDINGS (KRE) ( 29.68% OF TOTAL ASSETS)

Company Symbol % Assets BOK Financial Corporation (BOKF) 3.13 CITY NATL CP (CYN) 2.93 FIRST HORIZON NTL CP (FHN) 3.07 First Niagara Financial Group I (FNFG) 3.09 Hancock Holding Company (HBHC) 2.53 Hudson City Bancorp, Inc. (HCBK) 3.01 Prosperity Bancshares, Inc. (PRSP) 2.78 Sterling Bancshares, Inc. (SBIB) 2.76 T C F FINANCIAL CORP (TCB) 3.28 Westamerica Bancorporation (WABC) 3.1

 

The investment (UYG) seeks daily investment results, before fees and expenses, which correspond to twice the daily performance of the Dow Jones U.S. Financials index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

TOP 10 HOLDINGS (UYG) ( 48.90% OF TOTAL ASSETS)

Company Symbol % Assets BK OF AMERICA CP (BAC) 5.68 BANK OF NY MELLON CP (BK) 2.09 Djusfn Swaps N/A 10.14 Djusfn Swaps N/A 4.68 GOLDMAN SACHS GRP (GS) 4.03 JP MORGAN CHASE CO (JPM) 9.08 MORGAN STANLEY (MS) 2.26 US BANCORP (USB) 2.19 VISA INC. (V) 1.99 WELLS FARGO & CO NEW (WFC) 6.76   The investment (FAS) seeks to replicate, net of expenses, 300% of the daily performance of the Russell 1000 Financial Services Index The fund will invest at least 80% of assets in securities that comprise the index. It will also utilize financial instruments that, in combination, provide leveraged and unleveraged exposure to the index. The fund is nondiversified. TOP 10 HOLDINGS (FAS) ( 230.34% OF TOTAL ASSETS)   Company Symbol % Assets BK OF AMERICA CP (BAC) 6.12 BANK OF NY MELLON CP (BK) 2.12 GOLDMAN SACHS GRP (GS) 4.49 JP MORGAN CHASE CO (JPM) 7.76 MORGAN STANLEY (MS) 2.2 Russ 1000 Finan Indx Swap N/A 195.46 THE TRAVELERS CO (TRV) 1.45 US BANCORP (USB) 2.06 VISA INC. (V) 1.69 WELLS FARGO & CO NEW (WFC) 6.99

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ETF BASIC NEWS, KRE, NYSE:FAS, NYSE:FAZ, SKF, UYG, XLF