Financial stocks rallied Thursday on favorable economic news as oil prices fell and economic growth in the second quarter turned out stronger than expected.
The American Banker index of top 50 banks rose 3.27%, and the index of 225 banks was up 4.65%. The S&P 500 increased 2.22%, and the Nasdaq Composite climbed 3.33%. Stocks also picked up on positive earnings expectations. A report released Tuesday by Keefe, Bruyette & Woods Inc. predicted per-share earnings growth of 11.1% in the third quarter for the large-cap banks it follows and a more sluggish result of 8.5% for the regionals.