Bank stocks rose Wednesday as bond prices declined on news the Federal Reserve was unlikely to raise interest rates.
The Standard & Poor's index of major banks rose 0.95%, while the overall S&P 0.20%.
The Wall Street Journal reported Wednesday that an internal Fed study is recommending that policymakers wait until a recession hits to combat inflation.
The yield on the 30-year Treasury bond fell for the third straight day, dropping to a 7.12% yield in late-afternoon trading.
CS First Boston Inc. analysts Bradley Ball and Eric Rothman rated Banc One Corp., Mellon Banking Corp., NationsBank Corp., and KeyCorp initial "buys" and PNC Bank Corp. an initial "hold." The two analysts replaced Thomas Hanley, the high-profile analyst who left for UBS Securities earlier this year.
First USA Corp. declined 2.4% to $50.875 after a published report quoted David Tice, whose Prudent Bear Fund shorts stocks, saying the credit card company would soon be awash in consumer debt and its stock price could fall to as low as $10.