Bank stocks bounced around Thursday but ended the day in positive territory after mixed reports on capital requirements and bond sales.
The KBW Bank Index fell in early trading after The Wall Street Journal, citing unnamed sources, reported that regulators decided to limit the portion of stress test capital shortfalls that might be covered by anticipated revenue to 5%.
But the index climbed after positive results from a $26 billion auction of seven-year Treasury notes, a day after the yield on the 10-year note fell 2 basis points, to 3.73%. The index rose 2.89% for the day.
"It looked early on that there would be a bit of a selloff after the Journal article about not using revenue as capital, but investors shook that off," said Peter McCorry, a senior trader at KBW Inc.'s Keefe, Bruyette & Woods Inc. "Then there was some relief over the seven-year auction after the 10-year selloff."
JPMorgan Chase & Co. rose 5.7%, while Bank of America Corp. climbed 3.6%. Wells Fargo & Co. rose 2.9%. PNC Financial Services Group Inc. rose 6.2%. U.S. Bancorp rose 5.4%.
Among regionals, Marshall & Ilsley Corp. rose 4.8%, and Capital One Financial Corp. rose 4.4%. Valley National Bancorp in Wayne, N.J., climbed 1.6%.
The Dow Jones industrial average rose 1.25%, and the Standard & Poor's 500 rose 1.54%.
The Labor Department said that initial unemployment claims for the week that ended May 23 fell 2% from the week before, to 623,000. Analysts had expected 635,000 claims. However, the number of people continuing to receive unemployment benefits rose to 6.78 million.