Bank stocks enjoyed one of their strongest days ever Wednesday following a favorable government report that dampened investors' concerns about a hike in interest rates. The Standard & Poor's bank index rose 4.65%, its seventh-highest daily gain, as the sector handily outpaced the rest of the market.

Bank stocks rallied in tandem with Treasury bond prices, which got a boost after the Commerce Department said that orders for U.S. durable goods fell 1.3% in September. The decline suggests that the economy is running smoothly with little hint of inflation.

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