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Bank stocks extended last week's big rally on Monday as persistent fears about the underlying health of the beleaguered sector continue to subside.
JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500) gained 4% and nearly 12% respectively in early afternoon trading. Shares of Citigroup (C, Fortune 500), which slipped to a low of 97 cents a share earlier this month, enjoyed its seventh-straight gain, climbing more than 30% to about $2.32.
Bank stocks have rallied in four out the last five trading sessions after top executives at some of the biggest firms, including JPMorgan Chase and Citigroup, indicated that they were profitable during the first two months of the year.
The KBW Bank Index and S&P Banking Index, two widely-watched sector indicators, gained 37% and 46% last week.
Helping lead bank stocks higher Monday was a report that the British banking giant Barclays (BCS) was looking to sell its iShares business, a part of its asset-management division. The Wall Street Journal reported that the sale could fetch $5.6 billion.
Also providing a boost was Monday's proposal by the Financial Accounting Standards Board, the private-sector group that sets U.S. accounting rules along with the SEC, to give companies that rely on mark-to-market accounting greater leeway in valuing assets.
The proposed change could help stem the tide of painful writedowns that banks have suffered over the last year and possibly fuel investor interest in the group.
"There is a general relief that these banks are not in an endless tailspin," said Marshall Front, chairman of Chicago-based money management firm Front Barnett Associates. "People are now looking for opportunities instead of running from risk."
