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Bank stocks try to snap 3-day slide after Wells Fargo, JPMorgan & Citigroup beat estimates

A trader, center, wears a Citigroup jacket while working on the floor of the New York Stock Exchange (NYSE) in New York.
Michael Nagle | Bloomberg | Getty Images

Bank stocks rose on Friday on the back of stronger-than-expected quarterly results from three major U.S. banks.

The SPDR S&P 500 Bank ETF (KBE) rose more than half a percent, ending a three-day losing streak, its longest since August.

Before the bell on Friday, banking giants JPMorgan Chase, Wells Fargo and Citigroup all posted better-than-expected quarterly results, beating estimates on both the top and bottom lines.

"I think we're seeing a big sigh of relief from investors that the banks are not imploding here," said Mike Bailey, director of research at FBB Capital Partners. "You had a bit of very-short-term panic yesterday."

The financials sector was the best performing segment in the S&P on Friday, with Goldman Sachs and Morgan Stanley outperforming shares of JPMorgan, Citigroup and Wells Fargo.

"I think it was a good quarter for JPMorgan, Citigroup and Wells Fargo. But, if you really dig in, the real gains were in fixed income sales and trading," said Devin Ryan, an analyst at JMP Securities. "That tends to be a stronger percentage of gains for Goldman Sachs and Morgan Stanley than other banks. I think that's why you're seeing those two outperform."

Goldman Sachs and Morgan Stanley are scheduled to report quarterly results next week.

DISCLOSURE: JMP Securities makes a market in both Goldman Sachs and Morgan Stanley.