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FIFTH THIRD BANCORP (FITB) 9.97 -$0.08 (-0.80%) 04:10AM (15 mins delay)

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Bank Rally Driven by Potential Future Earnings

May 11, 2009 - 2:39 AM EDT

Eric Winchell submits:

The SPDR Financials ETF (XLF) is up 111% since the March 6th close. The rally is being driven by potential future earnings, which are naturally speculative, but the stocks were at such extreme lows that it was not necessary to predict future earnings. At the lows, buyers only had to conclude that the companies were not going bankrupt.

At this point, the actual future earnings are becoming more important, but there could still be some long term opportunity here if earnings end up overshooting on the upside in a few years.

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Source: Seeking Alpha (May 11, 2009 - 2:39 AM EDT)