Updated from 4:27 p.m. ET with comment from Ron Beasley, and investment advisor in Houston.
Bank stocks fared even better than the broad market Monday, as investors cheered the withdrawal by former Treasury Secretary Lawrence Summers from consideration to be President Obama's nominee to succeed Ben Bernanke as Federal Reserve chairman.
KBW Bank Index
(I:BKX) rose 0.8% to close at 64.17, with all 24 index components showing gains. The
Dow Jones Industrial Average
The Next Fed ChairBernanke's term ends on Jan. 31 of next year, leaving plenty of time for the Senate to confirm a nominee, however, Obama may face difficulty in finding a candidate who can clear the Senate Banking committee, before heading to the Senate floor for a confirmation vote. Summers has been critical of the Federal Reserve's accommodative monetary policy, while the other highest-profile candidate -- current Federal Reserve System Vice Chair Janet Yellen -- is favored by investors who wish for the central bank to maintain the course it has taken under Bernanke's leadership. Summers had faced plenty of opposition from Democratic members of the Senate Banking Committee, including Jon Tester (D., Mont.), who had gone on the record saying he was against Summers's potential nomination, and Jeff Merkley (D., Ore.), Sherrod Brown (D.,-Ohio) and Elizabeth Warren (D-Mass.), who were widely expected at least to question the suitability of Summers for the role. Some of the criticism springs from his support of the Commodity Futures Modernization Act of 2000, which prevented direct regulation of derivatives trading between large banks.
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