After faltering in morning trading, bank stocks rebounded Wednesday as investors got a better grasp of second-quarter results from a number of banking companies.
The KBW Bank Index closed up 0.95%. The slow start came after Wells Fargo & Co. posted higher-than-expected credit deterioration. But even Wells trimmed its losses over the course of the day and closed down 3.6%. Investors took a second look at Wells' strong revenue generation and liked what they saw, said Frank Barkocy, the director of research at Mendon Capital Advisors.
"Bank stocks started to firm up as earnings were more fully digested, including those who reported yesterday who appeared to be in an oversold position," Barkocy said. One example would be Comerica Inc., whose shares rose 2.3% after falling 10.1% Tuesday.
U.S. Bancorp's shares rose 3.8% Wednesday after the Minneapolis company posted earnings that beat expectations by 2 cents.
Other large and regional banking companies that reported Wednesday included SunTrust Banks Inc., whose shares rose 6.7%; KeyCorp, which rose 7.2%; Northern Trust Corp., which rose 0.7%; Susquehanna Bancshares Inc., which rose 11 cents, to $4.07; Bank of New York Mellon Corp., which fell 6.2%; Cullen/Frost Bankers, which fell 6.5%; and Morgan Stanley, which fell 0.1%.
JPMorgan Chase & Co. fell 0.3%; Bank of America Corp. rose 0.3%; Citigroup Inc. rose 15 cents, to $2.80; Regions Financial Corp. rose 8 cents, to $3.50; and Zions Bancorp. rose 3%.
The Dow Jones industrial average fell 0.39% and the Standard & Poor's 500 fell 0.05%.