Bank stocks and the broader markets rose Tuesday after reports that consumer confidence rose more than expected in August.
The KBW Bank Index rose 0.6%, the Dow Jones industrial average rose 0.42% and the Standard & Poor's 500 rose 0.24%.
The Conference Board's consumer confidence index rose to 54.1 in August from an upwardly revised 47.4 in July. Analysts on average had expected a reading of 47.5.
Economists at Wells Fargo Securities wrote in a note Tuesday that the "still fragile state" of consumer confidence appropriately reflects current economic conditions.
"The economy, like the consumer confidence index, bottomed out earlier this year but remains at perilously low levels," the economists wrote. "There are reasons to be optimistic but most of the improvement so far has been apparent in the statistics rather than on Main Street."
Though the stock market, key indicator indexes and home sales have improved, employment conditions remain weak, the economists wrote. Layoffs have stabilized, but companies have not begun to hire again.
Also Tuesday, Standard & Poor's/Case-Shiller announced that the U.S. National Home Price Index rose 1.4% in the second quarter compared with the first quarter.
JPMorgan Chase & Co. rose 1.3%, Bank of America Corp. rose 2.3%, Wells Fargo & Co. rose 0.04%, PNC Financial Services Group Inc. rose 2.2%, SunTrust Banks Inc. rose 0.9%, BB&T Corp. rose 0.3%, KeyCorp rose 1.1% and Fifth Third Bancorp rose 2.1%.
Decliners included Capital One Financial Corp., 0.2%, Marshall & Ilsley Corp., 1.5%, Comerica Inc., 1.4%, and Citigroup Inc., which fell 7 cents, to $4.75.
