Wall Street Rises on Bank Initiatives

Stocks in New York traded higher out of the gate Friday as investors shook off a mess of fourth-quarter earnings and took in news of more musical assets from the big banks.

The Dow Jones Industrial Average was rising 86 points at 8229, and the S&P 500 was higher by 11 points at 855. The Nasdaq was rising 21 points at 1533.

As stocks started higher, longer Treasuries were falling; the 10-year note was recently down 1 24/32 to yield 2.4%, the 30-year was up 2 28/32, yielding 3%.

The Dow fell below 8000 on Thursday -- led by declines in Citigroup (C) and Bank of America (BAC) -- before rebounding to close in slightly positive territory. Investors, skeptical about the banks' multibillion-dollar losses and inability to function without more help, shook off those anxieties early Friday however.

Citigroup reported a fourth-quarter loss of $8.29 billion early Friday and said it will split its operations in two, separating its traditional banking business from its riskier assets. The disassembly follows a deal earlier in the week to combine its brokerage business with Morgan Stanley (MS).

Meanwhile, Bank of America sprung early results on investors. The bank lost $2.39 billion, or 48 cents a share, in the fourth quarter. The behemoth bank, which has struggled to swallow the acquisitions of Merrill Lynch and Countrywide, will now receive an additional $20 billion in support from the government. In a similar fashion to the deal the government struck with Citi last fall, the bank will guarantee to cover up to $118 billion in losses on loans and securities backed by residential and commercial real estate.