The broad indexes rebounded following comments from Federal Reserve Chairman Ben Bernanke to the Joint Economic Committee of the U.S. Congress, in which the Fed Chairman expressed confidence that "European leaders are strongly committed to addressing" the sovereign debt crisis within the Eurozone. Investors also cheered the news that executives of Deixa SA were discussing a possible "good bank/bad bank" breakup plan for the company, with French and Belgian officials.
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The KBW Bank Index (I:BKX) climbed 4.5% to close at $35.17, with all 24 index components showing gains for the session, except for First Niagara Financial Group, which was down 3% to close at $8.66.Shares of First Niagara have decline 41% since they closed at $12.25 on July 29, which was the last trading session before the Buffalo, N.Y. lender announced its $1 billion deal to acquire 195 branches from HSBC (HBC). The deal is expected to be completed early next year, with First Niagara issuing between $750 and $800 million in new common shares. Of course, as the shares decline, First Niagara's shareholders face a significant increase in the dilution of their stakes from the planned offering.Shares of Fifth Third Bancorp (FITB) rose 9% to close at $10.64. Zions Bancorporation (ZION) was up 8% to close at $14.74. Large U.S. banks seeing shares rise 6% Tuesday included Bank of New York Mellon (BK), closing at $18.82; Citigroup (C), at $24.39; Commerce Bancshares (CBSH), at $35.79; Cullen/Frost Bankers (CFR), at $49.96; Comerica (CMA), at $23.51; JPMorgan Chase (JPM), at $30.26; Northern Trust (NTRS), at $36.02; Regions Financial (RF), at $3.19; and State Street (STT), which closed at $32.06.Huntington Bancshares (HBAN) was up 5% to close at $4.91.Shares of Bank of America (BAC) rose 4% to close at $5.76, after announcing plans to shutter its correspondent mortgage business, after failing to sell the unit.Bank of America was among five holding companies for which Wells Fargo significantly cut earnings estimates on Tuesday. RELATED STORIES: Bank of America Dumps Half Its Mortgage Business >5 Big Bank Earnings Estimates Cut by Wells Fargo >Housing Regulator Falls Short On Robo-Signing >Bank of America $5 Debit Fee Protest Gains Steam >Bank Lending Has Bottomed: Credit Suisse >Mortgage Mess 'Next Shoe to Drop' is FHA: Analyst >Bank of America $5 Fee is Peanuts: Occupy UnitedHealth >Texas Bank Fails; 2011 Tally at 74 >Mortgage Rates 'Lowest on Record': Freddie Mac >Poll: Will You Leave Bank of America Over The Debit Card Fee? > Bank of America Failure, Small Bank Opportunity > How Banks Make Money Without Lending > Visa: Everywhere You Want a Fee >-- To contact the writer, click here: Philip van Doorn.To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.
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