SAN FRANCISCO (MarketWatch) � U.S. financial stocks recovered from earlier losses on Friday to close out the session as the best sector on the S&P 500 after the U.S. government said it will expand a program to assist homeowners on the verge of foreclosure.
The Treasury Department said it will triple the incentive payments to investors who agree to cut the amount homeowners owe as part of a program to help homeowners and provide relief to hard-hit communities.
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The program, known as the Home Affordable Modification Program, includes allowing borrowers to reduce monthly loan payments and, if eligible, reduce the amount they owe on their loan. Read about expanded support for homeowners on verge of foreclosure
The Financial Select Sector SPDR ETF XLF , which tracks the financial stocks in the S&P 500, closed up 0.4%, outperforming the S&P 500 Index SPX which fell 0.2%. For the week, financial stocks retreated 0.2%.
Goldman Sachs GS , Regions Financial RF �and MetLife MET �were among the leaders, all advancing more than 2%.
Goldman Sachs and Morgan Stanley MS �also got a boost from a Wall Street Journal report that they are likely to have roles in Facebook�s much anticipated initial public offering; that IPO filing could come as early as next week. Read more about Facebook�s expected IPO filing
Financial stocks had earlier traded in negative territory on disappointing gross domestic product data. Fourth-quarter GDP grew 2.8%, compared with 1.8% in the third quarter, according to the Commerce Department earlier Friday. But a significant portion of the expansion was due to a buildup in inventories which overshadowed the sequential increase in growth. Read about Q4 GDP growth
Notable losers included Chubb Corp. CB �which sank 4.2%. The insurer late Thursday reported its fourth-quarter profit fell 27% due to higher losses and loss expenses. Read more about Chubb�s quarterly results
T. Rowe Price Group Inc. TROW �slumped 2% after reporting fourth-quarter profit slipped 1.7% as higher costs and modest increases in spending masked better-than-expected revenue.
Financial stocks listed on the Dow Jones Industrial Average DJIA �all closed lower. Travelers Cos. Inc. TRV �shed 1.1%, Bank of America Corp. BAC slipped 0.1%, J.P. Morgan Chase & Co. JPM shed 0.8% and American Express Co. AXP fell 0.3%.
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