Bank stocks and the broader markets fluctuated Tuesday while President Obama, Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Tim Geithner addressed the government's continued efforts to fix the financial sector.
The KBW Index closed down 1.64% the Dow Jones industrial average closing down 0.55%, at 6726.02, and the Standard & Poor's 500 closed down 0.64%, dropping below 700 for the first time since 1996. On Monday the Dow closed below 7000 for the first time since 1997.
"It seems that 'selling on the news' is wearing thin," said Sean Clair, a trader at Boenning & Scattergood Inc. in West Conshohocken, Pa. "The bulls and the bears are fighting back and forth now."
Obama told reporters at a meeting with U.K. Prime Minister Gordon Brown that he was "absolutely confident" the government's programs to shore up the financial industry would work.
Bernanke told the Senate Budget Committee that even though the banking system has not yet stabilized, there are no "zombie" banks and nationalization is not "warranted or necessary."
Geithner told the House Ways and Means Committee that the $250 billion the Obama administration requested in its 2010 budget proposal in case a further bailout of financial firms is needed is only a "placeholder" provision, and the actual amount needed could be much higher. However, Geithner said the administration would seek Congress' approval before asking for more money.
Gainers Tuesday included Citigroup Inc., which rose 2 cents, to $1.22; Bank of America Corp., which rose 2 cents, to $3.65; and People's United Financial Inc. of Bridgeport, Conn., which rose 0.9%.
Decliners included JPMorgan Chase & Co., which fell 0.7%; U.S. Bancorp, which fell 4%; Wells Fargo & Co., which fell 1.6%; and Regions Financial Corp., which fell 14 cents, to $3.43.
TCF Financial Corp. fell 8.4%. The Wayzata, Minn., company said late Monday that it plans to give back the $361 million it received from the Treasury Department's Capital Purchase Program.
Colonial BancGroup Inc. fell 2 cents, to 37 cents. The Montgomery, Ala., company disclosed late Monday that it has been operating under an informal memorandum of understanding with regulators for two months.