Exchange-traded funds tracking European bourses were among the best performers of Tuesday's session, as shares of U.K. lender Northern Rock rebounded.

Northern Rock had pressured European indices during the prior two sessions after the lender sought emergency funding from the Bank of England, a sign that the subprime mortgage mess was spilling into overseas markets. However, shares were rallying 10%, and London's FTSE 100, the CAC 40 in Paris and Germany's Xetra Dax were all up 1% or more.

The iShares MSCI Spain Index ( EWP) was adding $1.39, or 2.5%, to $57.06. The iShares MSCI France Index ( EWQ) was up 64 cents, or 1.8%, to $36.33. The iShares MSCI United Kingdom Index ( PEH) rose 28 cents, or 1.2%, to $23.48. The iShares S&P Europe 350 Index ( IEV) was higher by $1.82, or 1.6%, to $113.12.

Bundled securities tracking the financial sector were also higher, thanks to strong earnings from Lehman Brothers ( LEH), as well as expectations of an interest rate cut by the Federal Reserve. Lehman beat Wall Street's forecasts by 7 cents a share, and the stock was up 3.5%.

The Federal Open Market Committee, the central bank's policymaking arm, is widely expected to cut the overnight Fed funds rate when it announces its decision at 2:15 p.m. EDT, a move that will help liquidity problems in tightening credit markets.

The Ultra Financials ProShares ( UYG) was rising $1.23, or 2.3%, to $55.78. The iShares Dow Jones U.S. Financial Services ( IYG) was adding $1.60, or 1.3%, to $121.76. The First Trust Financials AlphaDEX ( FXO) ETF was recently up 28 cents, or 1.6%, to $17.64.

An earnings beat by electronics retailer Best Buy ( BBY) was supporting a rise in retail-related ETFs. Before the opening bell, Best Buy handily beat second-quarter earnings targets and also raised its full-year profit forecast, boosting shares by 4.4%.

The SPDR S&P Retail ( XRT) was recently climbing 78 cents, or 2%, to $39.20. The PowerShares Dynamic Retail ( PMR) was up 31 cents, or 1.7%, to $18.08. The Retail HOLDRs ( RTH) advanced $1.42, or 1.4%, to $101.48.

On the other hand, the United States Natural Gas ( UNG) ETF was the worst decliner of the session, as natural gas futures fell 19 cents to $6.46 per million British thermal units. The ETF was lower by $1.05, or 2.6%, to $39.41.

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