Bank stocks and the broader markets managed to stay in positive territory for most of Friday, aided by a report that the U.S. economy is contracting at a slower pace.

The KBW Bank Index rose 1.13%, ending the week up 8.36%. The Dow Jones industrial average rose 0.19% and the Standard & Poor's 500 rose 0.07%.

The Commerce Department said Friday that gross domestic product fell at an annual rate of 1% in the second quarter compared with the first quarter. Economists on average had expected a 1.5% decline.

Economists at Wells Fargo Securities wrote in a note Friday that they continued to expect gains in the economy in the second half of the year.

"Economic fundamentals support the case for recovery as a massive drawdown in inventories will reverse and federal government spending will be supportive," the economists wrote. "Inflation is still low."

Gainers included JPMorgan Chase & Co., 0.5%, Bank of America Corp., 5.9%, PNC Financial Services Group Inc., 3.1%, SunTrust Banks Inc., 3%, BB&T Corp., 1.1%, Capital One Financial Corp., 1%, Comerica Inc., 0.2% and Citigroup Inc., which rose 3 cents, to $3.17.

Decliners included Wells Fargo & Co., which fell 1.7%, U.S. Bancorp, 0.3%, Marshall & Ilsley Corp., 1.2% and M&T Bank Corp., 1.4%.

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