The Financial Post reports in its Tuesday, July 15, edition that as the largest U.S. banks begin earnings season, analysts believe Wall Street's low profit expectations may boost lenders' stock performance. A Bloomberg dispatch to the Post reports that the KBW Bank index has risen 37 per cent since April and is near record highs, outperforming the S&P 500 and Nasdaq 100 indices. Investors may still undervalue the financial sector. While it represents 18.6 per cent of S&P 500 earnings, its weighting is only 13.7 per cent, a gap larger than the 15-year average. Analysts expect a slight 1-per-cent decline in earnings for the S&P 500 Financials index in the second quarter. Bloomberg Intelligence's Michael Casper says, "Investors appear to have baked little hype into financials' earnings." That leaves "room for a fair number of surprises to sustain the sector"s rally." Several major banks are reporting earnings this week, starting with JPMorgan, Citigroup and Wells Fargo on Tuesday, followed by Goldman Sachs, Morgan Stanley and Bank of America later. Strategists anticipate positive factors for the sector, including potential regulatory easing and expectations for increased mergers and acquisitions.