Rally Proves to Be One-Day Event

Bank stocks fluctuated Wednesday morning but fell in the afternoon as investors took profits from Tuesday's rally.

The KBW Bank Index closed down 3.83%, after posting a 4.01% gain the day before.

"We had banks outperforming yesterday, and there was just some giving a bit of that back today," said Gary Townsend, the chief executive of Hill-Townsend Capital LLC.

Bank stocks rose in the morning after the National Association of Realtors said home sales in April rose 2.9% from the month before, to an annual rate of 4.68 million units. Analysts on average had expected sales to rise to 4.66 million units, according to Thomson Reuters.

But bank stocks then fell to close in negative territory. Investors may have also been discouraged by reports that bondholders of General Motors Corp. rejected the company's plan to swap debt for stock, which brought the automaker closer to bankruptcy.

The Dow Jones industrial average fell 2.05% and the Standard & Poor's 500 fell 1.90%.

Decliners included JPMorgan Chase & Co., 5.2%; Bank of America Corp., 0.6%; Wells Fargo & Co., 6.1%; PNC Financial Services Group Inc., 5%; U.S. Bancorp, 5.7%; and Citigroup Inc., which fell 7 cents, to $3.70.

Among the regionals, SunTrust Banks Inc. fell 5.6%, Zions Bancorp. fell 4.9%, KeyCorp fell 8.5% and Fifth Third Bancorp fell 4%.

Regions Financial Corp.'s shares rose 13 cents, to $3.96, after Deutsche Bank North America analyst Matthew O'Connor upgraded the Birmingham, Ala., company's stock to "buy," from "hold," and said a recent sell-off in the stock was "overdone."

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