Bank stocks underperformed broader markets Thursday but ended in positive territory thanks to a late rally.
"It was a pretty convincing turnaround," said Peter McCorry, a trader at Keefe, Bruyette & Woods Inc.
He said he was at a loss to explain why the group, which was down for much of the day, finished so strong. Perhaps a climbing dollar and relatively stable oil prices gave investors a sense of stability, he offered.
The U.S. Labor Department's report that the number of first-time people filing for state unemployment benefits rose by 8,000 last week, to 357,000, did not seem to have much of an impact on the stock market.
The American Banker bank index of 225 stocks rose 0.02% after losing as much as 1.22% by noon. The thrift index rose 0.52%, the Nasdaq 0.14%, and the Dow Jones industrial average 0.56%.
Fifth Third Bancorp of Cincinnati rose for the first time since Dec. 2, the day it announced, after the market closed, that it would restructure its balance sheet for rising interest rates. Its shares rose 1.1% Thursday.
Shares of SunTrust Banks Inc. rose 0.89% after the Atlanta company announced an executive shuffling that included the naming of James Wells as president and chief operating officer. Mr. Wells, 58, had been a vice chairman; chief executive L. Phillip Humann had been president.
Betsy Graseck, an analyst with Morgan Stanley, initiated coverage for J.P. Morgan Chase & Co. with an "overweight" rating and a $42 price target on Thursday, saying the company would have "franchise improvement driven by faster growth and lower volatility."
"JPM is in the beginning phase of a three-stage growth strategy that we expect will last through 2009," Ms. Graseck's report said. She expects that by 2009 each of JPM's key units will be operating at best-in-class levels with a firm expense ratio of 52%, she wrote.
JPM Chase's stock rose 0.04%.
Shares of E-Loan Inc. of Pleasanton, Calif., rose 14.5% to close above $3 for the first time since April, at $3.23. Mortgage company shares have been trading higher since Capital One Financial's purchase of HFS Group last month.
