Equity market results were mixed Tuesday, but bank stocks made up some of the steep losses the group suffered Monday.
Virtually all the shares that got hammered Monday rebounded, including Washington Mutual Inc., which rose 6.9%.
Shares of National City Corp. rose 3.8% after the Cleveland company confirmed it had signed memorandums of understanding with the Office of the Comptroller of the Currency and the Federal Reserve Bank of Cleveland in recent months about capital management, risk management, asset quality, and liquidity management.
The Wall Street Journal first reported about the memorandums on Friday. On Tuesday, Peter E. Raskind, National City's chairman, president, and chief executive officer, said in a press release, "Generally, the relationship between a bank and its regulators is characterized by confidentiality."
"Unfortunately, however, someone has breached the confidential relationship between National City and our regulators," he said. But the disclosure was good news for Nat City's stock, which had fallen 9.7% Friday and 7.5% Monday.
Economic news was also mixed: The price of oil fell, the dollar strengthened, the trade deficit expanded, but exports increased. Economists said they expect stronger exports to help economic growth.
The Dow Jones industrial average rose 0.1%, while the Standard & Poor's 500 fell 0.2%. The index of banks in the S&P, however, rose 1.7%, and the Nasdaq bank index rose 0.4%.
Wachovia Corp., up 4.6%, and Citigroup Inc., 3.4%, were among the biggest gainers in the large-cap group. Fifth Third Bancorp fell 2.1%.
Shares of Republic First Bancorp Inc. of Philadelphia increased 33.9% after a group of financiers, led by former Commerce Bancorp Inc. chairman Vernon W. Hill 2nd, invested in Republic First.
Republic said it sold $10.8 million of convertible trust-preferred securities to a group of four investors led by Mr. Hill and Republic founder and chairman Harry D. Madonna.
"There is no reason the new Republic First Bank should not become the next great Philadelphia based success story," Mr. Hill said in a press release. He founded Commerce, of Cherry Hill, N.J., just outside Philadelphia, in the 1970s. Last year regulators pushed him out over concerns about corporate governance.
Consumer finance stocks did not do as well. Capital One Financial Corp. fell 0.8%, MasterCard Inc. 1.8%, Visa Inc. 2.2%, and Discover Financial Services 0.9%.
Standard & Poor's equity analyst Stuart Plesser downgraded MasterCard to "hold" from "buy," because of "concern about ongoing litigation." Discover filed a lawsuit against MasterCard and Visa, claiming $6 billion in damages and alleging that the two companies hampered competition.
Mr. Plesser upgraded Discover to "buy" from "hold" citing among other things "a possible litigation settlement."
