Stocks: Investor Confidence On Interest Rates Buoys Bank Stocks

Bank stocks continued to rally Monday amid rising investor confidence about interest rates.

The Standard & Poor's bank index gained 0.47%, and the Dow Jones industrial average rose 0.87%. The Nasdaq bank index rose 0.22%, and the S&P 500 jumped 0.51%.

The rally began Friday, when the Dow Jones industrial average, S&P bank index, and the shares of a number of individual banking companies reached record highs.

The rally was sparked by government reports on consumer prices and retail sales that convinced many investors that the Federal Reserve would not raise rates this month.

Big gainers Monday included First Union Corp., up 87.5 cents to $67.625; Comerica Inc., which gained 62.5 cents to $54.50; and Synovus Financial Corp., up $1.625 to $25.50.

Decliners included South Trust Corp., which fell 25 cents to $30.875, and Summit Bancorp, off 75 cents to $39.50.

Analyst Frank Barkocy of Josephthal Lyon & Ross Inc. said the bank rally could continue even if interest rates are raised 25 basis points at the Sept. 24 meeting of the Federal Open Market Committee.

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