The KBW Bank Index rose 0.39% Wednesday on mixed economic news.

The Commerce Department said that June durable goods orders shrank 2.5% from the previous month. Economists on average had expected a 0.6% decline.

Economists at Wells Fargo Securities said that, even taking into account the dip in June, durable goods orders were "firmly in positive territory at a three-month annual rate, which suggests a welcome momentum shift."

"Inventories have been drawn down at a staggering rate so far this year as business owners scramble to cut production in an effort to survive this recession," the economists wrote. "This depletion in stockpiles sets the stage for a gradual recovery, which appears to be underway."

Investors were encouraged when the Federal Reserve said that the recession had begun to ease or at least stabilize in most of its 12 districts.

Gainers included Bank of America Corp., up 1.4%; SunTrust Banks Inc., 1.6%; Marshall & Ilsley Corp, 4.6%; Fifth Third Bancorp, 4%, and Citigroup Inc., 25 cents, to $3.22 a share.

Decliners included JPMorgan Chase & Co., off 0.8%; Wells Fargo & Co., 0.6%; PNC Financial Services Group Inc., 3.5%; U.S. Bancorp, 1.4%, and Regions Financial Corp., 2 cents a share, to $3.89.

The Dow Jones industrial average fell 0.29%, and the Standard & Poor's 500 index dropped 0.46%.

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