Exchange-traded funds tied to the financial sector jumped on Wednesday, as expectations grew that the Federal Reserve could raise interest rates at its March meeting, which would lift the sector's net interest margins and boost profits. The Financial Select Sector SPDR ETF /zigman2/quotes/209660484/composite XLF +0.29% rose 2.2% in its biggest one-day advance since Nov. 16. The day's gain also took the fund to its highest level since December 2007. The Vanguard Financials ETF /zigman2/quotes/204539969/composite VFH +0.36% gained 2.2%, the iShares U.S. Financials ETF /zigman2/quotes/207031846/composite IYF +0.33% is up 1.6%, the iShares U.S. Financial Services ETF /zigman2/quotes/203872376/composite IYG -0.21% is 2.5% higher and the PowerShares KBW Bank Portfolio /zigman2/quotes/202716924/composite KBWB +0.99% surged 2.9%. The SPDR S&P Bank ETF /zigman2/quotes/201006419/composite KBE +1.05% rose 2.7% while the regional banking equivalent /zigman2/quotes/200108291/composite KRE +1.40% was 2.7% higher.
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Financial ETF hits highest level since 2007 on rate hike hopes