Bank stocks rang in 2010 with solid gains, riding a tide that also took several equity indexes to 15-month highs.
The KBW Bank Index rose 2.27%; the Dow Jones industrial average, 1.5%, and the Standard & Poor's 500 index 1.6%.
A key catalyst for Monday's gains was the improved outlook for manufacturing; the Institute for Supply Management's index of manufacturing activity rose to 55.9 in December, from 53.6 a month earlier. The index has been rising since August, and observers attribute the gains to a firming global economy.
Joe Battipaglia, a market strategist for the private-client group at Stifel Nicolaus & Co., told the Associated Press that the manufacturing data boosted expectations that an economic recovery is taking hold. "It looks like China is now the locomotive for the global economic train," he said.
Bank of America Corp. shares rose 4.2%. New Chief Executive Brian Moynihan made his first public appearance, telling a Raleigh economic forum that he was seeing signs of a "long, slow recovery." He also argued that big banks should be left intact because it is the best way to serve customers.
Cathay General Bancorp shares jumped 8.6% after DA Davidson & Co. raised its rating for the Los Angeles company to "buy," from "hold."
Other gainers included KeyCorp in Cleveland, up 7%; United Bancshares Inc. in East Charleston, W. Va., 5.3%, and Citigroup Inc., 2.7%.
Decliners included Prosperity Bancshares Inc. in Houston, off 1.1%; Wintrust Financial Corp. in Lake Forest, Ill., 1.1%, and South Financial Group Inc. in Greenville, S.C., 0.7%.
