Dimon Keeps Stocks Smiling Midweek

In case you were vacationing, dreaming of ways to punish Bernie Madoff or busy working, here's a recap of the week so far.

As of Wednesday's close, the Dow Jones Industrial Average is higher by 4.6%, the S&P 500 is higher by 5.6%, and the Nasdaq Composite is up 6%.

Investors were soured on Monday when U.K government announced it was taking a controlling stake in Lloyds Banking Group(LYG Quote), and the World Bank warned over the weekend that the world is falling into the first global recession since World War II.

News on a trio of mergers helped some individual stocks but failed to stoke the market. Merck(MRK Quote) bid $41 billion for its cholesterol-drug partner Schering-Plough(SGP Quote), Dow Chemical(DOW Quote) and Rohm & Haas (ROH Quote) reached an agreement to merge by April 1, and Genentech (DNA Quote) and Roche are (still) reportedly nearing a deal on Roche's prospective takeover.

On Tuesday , Citigroup chief Vikram Pandit offered some reassurance in an internal memo, saying the bank has had a strong start to 2009, while the The Wall Street Journal simultaneously reported U.S. officials' "contingency planning" in case they need to further stabilize Citi if conditions worsen for the bank.

Pandit's comments plus remarks by Rep. Barney Frank (D., Mass.) that he believes the uptick rule might be restored within a month were enough to send stocks soaring, namely banks.

Bank of America (BAC Quote)and Citigroup (C Quote) added 27.7% and 38.1%, respectively, in the session that led the major indices 5% to 7% higher.

Stocks decelerated on Wednesday but managed to claim the first back-to-back positive closes in a month as JPMorgan CEO Jamie Dimon reinforced Pandit's good news, saying JPMorgan also has been profitable for the first two months of 2009.