An improving outlook for financial stocks from Credit Suisse provided a supercharged lift to the sector ahead of Friday's unemployment data.

Credit Suisse's research team wrote in a note to clients Thursday that, overall, stocks for financial services companies are "still cheap" for 2010. Analysts projected that the release of substantial loan-loss reserves could begin boosting bank earnings beginning next year, contributing to a "more constructive" view of the sector.

The KBW Bank Index rose 4.11%. The Dow Jones industrial index gained 0.31% and the Standard & Poor's 500 index rose 0.4%.

Credit Suisse also provided a lift to individual banking companies.

Bank of America Corp. shares rose 3.3% after Credit Suisse raised its rating on the Charlotte company to "outperform," from "neutral." The analysts wrote that the B of A upgrade reflects the brighter outlook for the banking industry.

Shares at Fifth Third Bancorp in Cincinnati, which was the team's top regional pick, rose 6%.

SunTrust Banks Inc. shares jumped 6% a day after the Atlanta company said it had frozen salaries for all but one top executive. SunTrust raised the pay for William Rogers Jr. to reflect duties he picked up after being promoted to president last year.

Citigroup Inc. shares edged up 0.2%. The New York company said in a filing with the Securities and Exchange Commission that John Deutch, a former Central Intelligence Agency director, would not stand for re-election to Citi's board in April. Citi did not say why Deutch, a member of its nomination and governance committees, had decided to step down.

Other gainers included Huntington Bancshares Inc. in Columbus, Ohio, 11.1%; PNC Financial Services Group Inc. in Pittsburgh, 5.4%; and JPMorgan Chase & Co. in New York, 2%.

Decliners included Cascade Bancorp Inc. in Bend, Ore., 2.9%; Chemical Financial Corp. in Midland, Mich., 0.9%; and First Citizens Bancshares Inc. in Raleigh, 0.6%.

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