Bank stocks and the broader markets fluctuated Wednesday as the Obama administration announced a foreclosure relief plan to revive the economy.
The KBW Bank Index seesawed during the day and closed down 0.3%. The Dow Jones industrial average rose 0.04%, and the Standard & Poor's 500 fell 0.1%.
"It's a very choppy day not just for bank stocks, but for other stocks, as well, as there's an awful lot of plans out there to digest," said Tim Curran, a bank stock trader at Regions Financial Corp.'s Morgan Keegan & Co. Inc.
The plan President Obama detailed Wednesday is designed to help up to 9 million homeowners avoid foreclosure. It relies heavily on the government-sponsored enterprises and could cost much more than the $50 billion expected.
The three-part plan would help 3 million to 4 million "underwater" borrowers refinance through the GSEs, create a $75 billion Homeowners Stability Initiative to help 4 million to 5 million additional borrowers, and increase support for Fannie Mae and Freddie Mac.
The Federal Open Market Committee released the minutes Wednesday from its Jan. 27-28 meeting, in which the committee projected the economy would shrink by 0.5% to 1.3% this year.
Also Wednesday, Federal Reserve Board Chairman Ben Bernanke told members of the National Press Club that the unemployment rate, currently 7.6%, should top 8% within the next several months. He also said government efforts to improve the economy would fall flat if the banking system were not shored up first.
According to Mr. Curran, some bank stocks received a "little pop up" in prices, including SunTrust Banks Inc., which rose 4.9%, U.S. Bancorp, which rose 2.7%, and BB&T Corp, which rose 2.5%.
Other bank stocks declined. JPMorgan Chase & Co., which fell 0.65%, Bank of America Corp., which fell 6.7%, Wells Fargo & Co., which fell 4.7%, and Citigroup Inc., which fell 4.9%, to $2.91, dipping below $3 for the first time since March 1993.
Anchor BanCorp Wisconsin Inc. fell 20 cents, to $1.06, after posting a loss of $167.3 million, or $7.56 a share, for its fiscal third quarter, which ended Dec. 31. A year earlier the Madison company earned $6.3 million.
