Bank stocks caught the updraft of a global market rally on Monday, with shares of both regionals and money-centers climbing higher.
"We're starting the week on a very good note," said Joseph K. Morford, equities analyst at BT Alex. Brown.
Reflecting the optimism of the day, the Dow Jones industrial average closed above 8,100-at 8,107.78-for the first time in almost two months. The move followed dramatic gains in Hong Kong, Japan, and London.
Markets were reacting to several positive factors, including a muting of Asian woes, continued strong earnings reports, and indications that the Federal Reserve will probably leave rates unchanged after meetings this week.
"Asia looks for the time being to be solving its problems, and that gets through to the U.S. market," said Norman Jaffe of Fox-Pitt, Kelton Inc.
Still, no one was declaring an uninterrupted march forward, given the fickleness of the markets and bank stock in particular in the past few weeks. "We still need to watch closely because of all the recent volatility," Mr. Morford said.
The Standard & Poor's bank index rose 2.27% and the Dow Jones industrial average 2.55%. The Nasdaq bank index was up 1.64% and the S&P 500 rose 2.14%, moving above the 1,000 mark for the first time.
Among bank stocks that recouped some lost ground. Citicorp rose $5.50, to $125.50, and J.P. Morgan $3.75, to $104.9375.
Citicorp on Monday took the unusual step of detailing its overseas exposure for analysts and the financial press, including an update on Korea and the inclusion of Malaysian assets and liabilities. Analysts said the information, which expounded on Citicorp's recent fourth-quarter disclosure, was welcome, but not startling.
Citicorp and some other money-centers have come under fire from analysts who complain the institutions are too closed-mouthed about their foreign operations.
BankAmerica Corp. rose 68.75 cents, to $71.75, after Mr. Morford reiterated a "strong buy" recommendation after a meeting with management.
"They believe their Asian exposure is manageable, and their trading revenues are expected to bounce back in the first quarter," Mr. Morford said. On the domestic side, "underlying fundamental trends remained positive, with consumer loan growth accelerating" to an 18% annualized pace, he said.
Among regionals, First Tennessee was up $2.375, to $61.25; KeyCorp $1.1875, to $66.1875; and Mellon Bank Corp. 62.5 cents, to $61.
First American Corp. rose $1.3125, to $46.125, after analyst Joseph Roberto of Keefe, Bruyette & Woods raised shares to "attractive" from "market perform."
Mr. Roberto sees positives in the Nashville banking company's pending $2.44 billion purchase of Deposit Guaranty Corp., Jackson, Miss.
"Over the next couple of years we expect savings and revenue opportunities," Mr. Roberto said. However, "longer-term we're still concerned about the growth potential for Mississippi and how First American will address that."