Banking stocks edged higher Monday ahead of the Federal Reserve's latest guidance on interest rates.
The KBW Bank Index closed up 0.2%, at 50.56. This gain was enough to trim the broader financial sector's loss to 0.1% after it had been down more than 1%.
The 24-bank index recovered from a selloff that began after Senate Banking Committee Chairman Chris Dodd released his banking reform bill aimed at curbing risks and tightening regulatory oversight of the sector. Dodd dashed hopes that he would dilute proposals for stringent policies to limit the risk created in the financial system by major institutions. Bank stocks bounced back, though.
The overall markets were also mixed as investors awaited Tuesday's release of the minutes from the latest meeting of the Federal Open Market Committee, the Federal Reserve's monetary policymaking body. The minutes may add detail to the central bank's rationale for keeping short-term interest rates low, which suits the banks.
A report Monday showed that manufacturing activity in New York unexpectedly slowed in February.
The Dow Jones industrial average rose 0.17%, and the S&P 500 index 0.05%.
JPMorgan Chase & Co. fell 0.19%, and Citigroup Inc. was off 8 cents a share, to $3.89.
Wells Fargo & Co. rose 0.88%, and Bank of America Corp. was unchanged.
Among the regional banking companies, U.S. Bancorp rose 0.9%; SunTrust Banks Inc., 0.48%; KeyCorp, 0.26%, and Fifth Third Bancorp, 1.75%.