Banking stocks closed the week with modest gains Friday, as investors reacted favorably to some positive economic data, as well as the Obama administration's plans to overhaul the financial system.
The KBW Bank Index rose 2.05%, posting its second gain in as many days after a three-day slump.
The overall market was dragged down by falling oil prices that depressed energy stocks.
"The banks are one of the few [companies] that are having any momentum today," said Frank Barkocy, director of research at Mendon Capital Advisors Corp.
He attributed that momentum to a few factors. The proposed overhauls of the financial sector were not as onerous as some market watchers had feared, he said, and some upgrades and successful stock offerings earlier in the week bolstered confidence.
Also, financial stocks were still riding high on the news that jobless claims fell for the first time in five months, Barkocy said.
The five largest publicly traded U.S. banking companies closed up. JPMorgan Chase & Co. rose 2.43%, while Wells Fargo & Co. rose 2.07%. Bank of America Corp. climbed 2.48%, and PNC Financial Services Group Inc. climbed 1.64%. Citigroup Inc. rose 4 cents, to $3.17 a share.
Most regional banking companies fared well. Northern Trust Corp. rose 3.41%. SunTrust Banks Inc. rose 4.9%. Fifth Third Bancorp climbed 1.8%, and BB&T Corp. rose 1.39%.
U.S Bancorp fell 0.44%.
The Dow Jones industrial average fell 0.19%, while the Standard & Poor's 500 rose 0.31%.