Financial stocks led the market higher Wednesday as media reports trickled out that indicated balance sheets at the nation's biggest banks might not be as frayed as some had feared.
Dow Climbs 102, Nasdaq Finishes Up 5
NEW YORK (AP) — Investors are feeling more confident about putting their money in banks.
Financial stocks led the market higher Wednesday as media reports trickled out that indicated balance sheets at the nation’s biggest banks might not be as frayed as some had feared.
The word came a day ahead of the formal release of results from government “stress tests” aimed at determining which banks need to raise more capital. Investors relieved to have some answers scooped up shares of most banks, even those expected to have to come up with new money.
“To me, this rally has been more a recognition that maybe the end of the world is not at hand,” said Philip S. Dow, managing director of equity strategy at RBC Wealth Management.
American Express Co., JPMorgan Chase & Co. and Bank of New York Mellon Corp. will not be asked to raise more capital when federal officials announce the test results Thursday afternoon, but Regions Financial Corp. will need to bolster its reserves, according to people briefed on the results. Those people requested anonymity because they were not authorized to discuss the tests.
Citigroup Inc. will need to raise about $5 billion, according to a government official who requested anonymity because he was not authorized to discuss the matter. Earlier news reports put that number closer to $10 billion.
Bank of America Corp. and Wells Fargo & Co. also will be asked to raise capital, people familiar with the matter said earlier this week.
According to preliminary calculations, the Dow Jones industrial average rose 101.63, or 1.2 percent, to 8,512.28. The blue chips closed above the 8,500 mark for the first time since Jan. 9, leaving the Dow down only 3 percent for 2009.
The Standard & Poor’s 500 index rose 15.73, or 1.7 percent, to 919.53. The gains pushed the index higher for the year after a rally on Monday helped erase its losses from 2009.
The Nasdaq composite index rose 4.98, or 0.3 percent, to 1,759.10.