Bank stocks soared Friday as investors awaited additional steps by the government to shore up the financial industry.
The KBW Bank Index rose 11.94% for the day and 5.75% for the week.
Gary Townsend, the chief executive at Hill-Townsend Capital LLC, said investors were relieved to hear that Bank of America Corp. does not plan to go back to the government for more money.
Kenneth Lewis, B of A's chairman and CEO, said so Friday in a CNBC interview. He also said his company would not alter its strategy after receiving $45 billion from the government in October and January. Senate Banking Committee Chairman Chris Dodd, D-Conn., said Thursday that he did not want to nationalize B of A.
The Charlotte company's shares rose 26.7% Friday, to $6.13.
Treasury Secretary Timothy Geithner is expected to announce new plans Monday for fixing the financial sector; the plans could include relaxing the rules on mark-to-market accounting to make it easier for banks to unload distressed assets to a "bad bank" that the government could establish.
Word of the Treasury's plan, which began to spread Thursday afternoon, galvanized investors, according to Mr. Townsend.
JPMorgan Chase & Co. rose 12.6%. Citigroup Inc. rose 10.8%. Wells Fargo & Co. rose 17.6%, and U.S. Bancorp rose 8%.
Other gainers included Marshall & Ilsley Corp., which rose 39%; M&T Bank Corp., which rose 7.4%; and Comerica Inc., which rose 11.7%.
The broader markets also rose in anticipation of the government's plans for the financial sector and the stimulus package.
The Dow Jones industrial average increased 2.7%, and the Standard & Poor's 500 rose 2.69%.
Stocks rose despite a morning report from the Labor Department that 598,000 jobs were lost last month, and that the unemployment rate rose 40 basis points from December, to 7.6%. Economists on average had expected the department to report 524,000 job losses and an unemployment rate of 7.5%.
