Despite fluctuations in the broader markets, bank stocks rose Wednesday as investors anticipated the Senate's approval of a bailout plan.

The KBW Bank Index rose 6.93%. After a mixed session, the Dow Jones industrial average closed down 0.18%, and the Standard & Poor's 500 lost 0.32%.

Lou Brien, a market strategist at DRW Trading Group in Chicago, said bank stocks likely climbed "because the bailout plan is being revised." The provision in the bill that seeks to increase deposit insurance "without any cost to banks" may have resonated with investors.

The bill, which the Senate was expected to vote on Wednesday evening, included "sweeteners" meant to sway more House Republicans to support it. One of the new provisions would increase the FDIC insurance limit to $250,000.

On Monday two-thirds of the House Republicans voted against the bailout bill.

Mr. Brien said one likely reason the broader markets did not fare as well was an Institute of Supply Management report that the manufacturing index fell to 43.5 last month, from 49.9 in August. Economists had expected a reading of 49.5.

"There might be some broader concern for the economy, whereas the bank stocks do have a little bit of room to rally, because of how badly they've been beaten up," he said.

National City Corp. climbed 65%, to $2.89. Rumors have swirled that the Cleveland company, which is laden with bad mortgages, could be forced to sell itself.

"That's certainly plausible in this environment," said Sean Ryan, an analyst at Sterne, Agee & Leach Inc. "I've also heard there could have been technical buying of National City. Their stock was reweighted in indices due to a conversion of convertible debt issued during their recap in the second quarter, so that may have been a factor."

Other gainers included Huntington Bancshares Inc., which rose 22.6%; Citigroup Inc., which climbed 12%; and Bank of America Corp., which rose nearly 9%.

SunTrust Banks Inc. rose 9%, BB&T Corp. gained 4%, and Associated Banc-Corp, in Green Bay, Wis., gained 21.4%.

Jeff Davis, a veteran bank analyst in Nashville, said many community banks, particularly those with credit quality issues, are suffering as their bigger counterparts are being viewed as the industry's probable consolidators.

"The market is just discounting these banks, believing that they are still going to have a very rough go," Mr. Davis said.

Decliners included Ameriana Bancorp in New Castle, Ind., which fell 9.6%, and First State Bancorp. in Albuquerque, which shed 15.2%.

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