Industry experts were scratching their heads after banking stocks rose Thursday despite the release of new details on the Obama administration's plan to raise $90 billion through a fee on big banks.
The KBW Bank Index rose 1.64%, to 47.71, while the KBW Regional Banking Index rose 3.08%.
Joe Saluzzi, co-manager of trading at Themis Trading, was at a loss to explain the run-up in banking stocks in the face of what is essentially a tax to punish the largest firms.
"Unbelievable," he said. "You would think a you would have some sort of a reaction in the banks. … The market is truly an amazing thing. It has no rationale. It doesn't care about news."
"I was a little surprised," said Scott Siefers, an analyst with Sandler O'Neill & Partners LP.
Investors were bullish on financials a day before one of the country's largest banks, JPMorgan Chase & Co., reports fourth-quarter results on Friday. It is expected to report a profit on higher investment banking fees despite more consumer loan losses. JPMorgan Chase's shares rose 0.99%.
Other negative news failed to dampen investor enthusiasm. The Commerce Department said retail sales fell 0.3% in December; economists had expected an increase of 0.5%. The Labor Department said new claims for unemployment insurance rose 11,000 last week, to a seasonally adjusted 11,000. Economists polled by Thomson Reuters expected claims to rise just 3,000.
The Dow Jones industrial average rose 0.3% and the Standard & Poor's 500 index rose 0.2%.
Bank of America Corp. rose 1.2%, Wells Fargo & Co. rose 1.43% and Citigroup Inc. rose a penny, to $3.51.
BB&T Corp. rose 2.22%, Comerica Inc. rose 2.93%; KeyCorp rose 5.55%, M&T Bank Corp. rose 2.21%, U.S. Bancorp rose 2.51% and PNC Financial Services Group Inc. rose 1.4%.