Banking stocks rose Wednesday as investors latched onto signs the economy is improving in mixed fourth-quarter results from some of the country's largest banks.
The KBW Bank Index rose 1.38%, to 47.81, while the KBW Regional Banking Index rose 0.06%, to 49.16.
The broader markets dropped. The Dow Jones industrial average fell 1.14%, and the Standard & Poor's 500 index was off 1.06%.
Banking shares advanced as Bank of America Corp., Wells Fargo & Co. and U.S. Bancorp delivered good news on the credit front in their quarterly reports.
B of A and Wells Fargo each set aside less money to cover bad loans, even as their bad loans continued to rise. Still, their earnings were a big improvement from a year earlier. U.S. Bancorp had its loan-loss provisions shrink for the first time in 15 quarters.
B of A's shares rose 1.04%, while U.S. Bancorp gained 2.12%. Wells Fargo fell 1.63%.
Marshall & Ilsley Corp. and M&T Bank Corp., meanwhile, helped the group rally with their earnings reports. M&T's profits beat expectations and M&I said nonperforming assets fell as its net loss narrowed from a year earlier.
M&T rose 4%, while M&I rose 7.36%.
Other gainers included BB&T Corp., up 1.42%, Comerica Inc., 1.6%, PNC Financial Services Group Inc., 1.61%, KeyCorp, 2.96%, and Regions Financial Corp., 3.23%.
