Bank stocks rose Tuesday after the Treasury Department announced that 10 of the industry's largest institutions would pay back $68 billion in Troubled Asset Relief Program funds.
The KBW Bank Index rose 0.45%.
"The big news for bank stocks today is this permission to pay back Tarp — that's certainly good news if you can get the government off your back," said Jack A. Ablin, the chief investment officer at Bank of Montreal's Harris Private Bank in Chicago.
The Treasury left it to the banking companies to disclose which would be returning Tarp money, and announcements came from Northern Trust Corp., whose stock rose 1.8%; BB&T Corp., up 2.4%; Morgan Stanley, off 1.3%; State Street Corp., which gained 1.8%; JPMorgan Chase & Co., down 0.4%; U.S. Bancorp, off 0.9%; American Express Co., up 5%; Capital One Financial Corp., a 2.6% gain; Goldman Sachs, 0.7% higher, and Bank of New York Mellon Corp., up 0.9%.
In the Treasury's statement, Secretary Timothy Geithner said the repayments indicate a rebound for the banking system.
"These repayments are an encouraging sign of financial repair, but we still have work to do," he said.
Other gainers Tuesday included Wells Fargo & Co., 1.1%; PNC Financial Services Group Inc., 1.8%, and KeyCorp, 3.3%.
The decliners included Comerica Inc., 0.7%; Fifth Third Bancorp, 1.1%; Citigroup Inc., off a cent, to $3.41, and Regions Financial Corp., down a penny, to $4.06.
The Dow Jones industrial average fell 0.02%, and the Standard & Poor's 500 index rose 0.35%.
