Bank stocks ended a volatile day up slightly Tuesday as investors digested shakeups overseas and domestic uncertainty.

The KBW Bank Index traded down most of the day, coming up for air briefly in early afternoon trading and rebounding late to edge up 0.02%. The Dow Jones Industrial index shed 0.18%, and the Standard & Poor's 500 index gained 0.24%.

Royal Bank of Scotland PLC and Lloyds Banking Group PLC agreed to sell hundreds of branches and key units to placate European regulators concerned about the banks' long-term health. UBS AG added to worries, the Swiss bank posted a net loss of $552.9 million for its third quarter.

The moves highlighted the continued lack of clarity over how the United States will tackle financial institutions that remain dependent on government aid and have been viewed by some as "too big to fail." The Federal Open Market Committee, meanwhile, began a two-day meeting Tuesday, and policymakers were expected to leave interest rates unchanged.

Nicholas Colas, the chief market strategist at BNY ConvergEx Group, said options trading indicates that institutional investors are "betting" on volatility in financial stocks for the next 30 days due to a lack of clarity in the outlook for the U.S. economy. "We are in a very uncertain place," he said in an interview.

"A lot of the recent rally was based on hopes that the fourth quarter will be a rebounding quarter," Colas said. "We've been through what we hope is the worst, and the stimulus is showing some effect. Now we're waiting to see if the economy can stand on its own two feet."

Bank of America Corp. shares rose 1.2% after a report said the Charlotte company could consider hiring a CEO who prefers to live in New York. The report from Bloomberg News was based on comments made recently by retired B of A chief executive Hugh McColl Jr. at an event at Queens University in Charlotte.

Sterling Bancshares Inc. shares fell 1.9% a day after the Houston company said it would restate third-quarter earnings after agreeing to sell $51 million in loans and doubling its loan-loss provision, to $56.1 million. The move increased Sterling's loss for the quarter to $24.7 million, from the $6.1 million it had reported Oct. 22.

The gainers included Huntington Bancshares Corp. in Columbus, Ohio, up 5.8%; East West Bancorp Inc. in Pasadena, Calif., 4.3%, and National Penn Bancshares Inc. in Boyertown, Pa., 2.5%.

Decliners included Synovus Financial Corp. in Columbus, Ga., off 2.3%; U.S. Bancorp in Minneapolis, 1.3%, and Fulton Financial Corp. in Lancaster, Pa., 1.1%.

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