The KBW Bank Index fell for most of Monday as investors continued to cash in gains from previous rallies, but it closed up 0.81% on advances in utilities after news that China's sovereign wealth fund may invest in the U.S. power company AES Corp.
Raymond James & Associates analyst Anthony Polini wrote in a note Monday that the average stock price for the 40 largest banks and thrifts has advanced nearly 25% since mid-July, so the sector should remain vulnerable to a "healthy round" of profit-taking as the third-quarter earnings "preseason" approaches.
"We cannot help but think that a period of price consolidation lies ahead, as investors prepare to reload and take aim on increasing sector weightings later this year," he wrote.
Gainers included JPMorgan Chase & Co., up 2.0%; Bank of America Corp., 0.1%; Wells Fargo & Co., 1.8%; PNC Financial Services Group Inc., 1.1%; U.S. Bancorp, 0.6%; SunTrust Banks Inc., 1.1%; Capital One Financial Corp., 0.9%; BB&T Corp., 2.1%; Fifth Third Bancorp, 0.7%, and Zions Bancorp., 3%.
Decliners included Marshall & Ilsley Corp., off 0.4%; Citigroup Inc., 9 cents a share, to $4.52, and UCBH Holdings Inc., 3 cents, to $1.03 a share.
The Dow Jones industrial average rose 0.22%, and the Standard & Poor's 500 index 0.63%.