Wall Street Edges Higher in Last Hour

Updated from 1:48 p.m. EST

After zigzagging above and below even throughout the day, stocks in New York were on the rise in the final hour of trading, as investors came to terms with fourth-quarter earnings reports and some big changes in the banking sector.

The Dow Jones Industrial Average was rising 70 points at 8288, and the S&P 500 was higher by 5 points at 849. The Nasdaq was up 14 points at 1526.

The financial sector's multibillion-dollar losses and skepticism about its inability to function without more government has kept pressure on the market today, with Bank of America (BAC) and JPMorgan (JPM) at the forefront of declines on Friday.

Of the news in financials, Citigroup (C) 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 bank has struggled to swallow the acquisitions of Countrywide and in particular Merrill Lynch, which lost a record $15.31 billion in the quarter, and will now receive an additional $20 billion in support from the government.

Shares fell nearly 14% and were leading the decliners on the Dow. "It's a collapse of confidence," says, Bernie McGinn, founder of McGinn Investment Management.

Now investors are legitimately questioning whether Bank of America CEO Ken Lewis made a good decision in buying Merrill Lynch, says McGinn."You begin to question to the quality of management because in all of these high-profile shopping sprees, he's putting investors at risk."