Bank stocks fluctuated Wednesday but ended on a positive note as the Federal Reserve Board reported signs of economic improvement.
The KBW Bank Index closed up 5.1% after the Fed released its latest Beige Book, which stated that five of the central bank's 12 regional banks reported moderately slower economic decline in their regions.
"People are playing ahead of earnings, hoping they may make some money from these stocks, but overall, it's wiser to sell because of the recent run-up," said Sean Clair, a trader at Boenning & Scattergood Inc. in West Conshohocken, Pa.
Charles Schwab Corp.'s stock rose 10.3%. The San Francisco company said Wednesday that its first-quarter net income fell 29% from a year earlier, to $218 million, or 19 cents a share. Analysts had expected it to earn 16 cents a share, according to Thomson Reuters.
The California Public Employees' Retirement System is planning to buy "billions of dollars" worth of bad assets as part of the Treasury Department's Troubled Asset Relief Program, board member Henry Jones said in a speech Wednesday in Seoul, according to Bloomberg News. The Sacramento fund may buy assets of Citigroup Inc. and other companies, Jones reportedly said. Despite the news, Citi's stock fell 4 cents, to $3.97.
Shares of Capital One Financial Corp. rose 1.5%, after the McLean, Va., company said that its net chargeoff rate for U.S. cardholders rose 1.27 percentage points from February, to 9.33% in March. Capital One also said that its net chargeoffs for cardholders overseas rose to 8.67% in March, from 7.2% in February. The company's net chargeoffs in auto loans fell to 4.08% in March, from 4.44% in February.
American Express Co. said Wednesday that its net writeoff rate for loans was 8.6% in March, down from 8.7% in February. Amex's shares rose 11.9%.
Susquehanna Bancshares Inc.'s stock rose 5.7%. In the afternoon the Lititz, Pa., company cut its dividend 81%, to 5 cents.
Other gainers included JPMorgan Chase & Co., 6.1%; Bank of America Corp., 3.5%; Wells Fargo & Co., 7%; U.S. Bancorp, 8.1%; PNC Financial Services Group Inc., 6.6%; SunTrust Banks Inc., 8.7%; and Huntington Bancshares Inc., which rose 47 cents, to $3.06.
The broader markets also fluctuated but closed up on the Beige Book news. The Dow Jones industrial average closed up 1.38% and the Standard & Poor's 500 closed up 1.25%.
In the morning the Fed said U.S. industrial production fell 1.5% in March, the same rate it fell in February. Analysts had expected a 1% drop in March.
The Labor Department said consumer prices fell 0.1% in March because of the continued drop in energy prices. Economists had expected a 0.1% rise in consumer prices.