Stocks Don't Sweat 'Stress,' Close Up

Updated from 4:22 p.m. EDT

Stocks in New York closed modestly higher Wednesday with financials out in front, particularly those whose capital needs were in the stress test discussion.

The Dow Jones Industrial Average climbed 101.63 points, or 1.2%, to 8512.28, while the S&P 500 rose 15.73 points, or 1.7%, to 919.53. The Nasdaq edged up 4.98 points, or 0.3%, at 1759.10.

The day started on a positive note, as ADP estimated that there were 492,000 jobs lost in the private sector in April, well below the 645,000 expected and a downwardly revised 708,000 in March.

Financials were at the forefront of advances. The Financial Selects Sector SPDR, which tracks the financial stocks in the S&P 500, and the KBW Bank Index were higher by 8% and 11.5%, respectively, a day before the release of the so-called stress test results.

Bank of America(BAC Quote) and Citigroup(C Quote) were up 17.1% and 16.6%, respectively, leading the Dow.

Bank of America was in the news on reports it could need to raise $34 billion, far more than the $10 billion originally rumored, according to The New York Times and various media. Bank of America shares were more than 10% lower early but reversed completely before the open.

There seemed to be some confusion over whether it would have to be "fresh capital" among reports. The Times reported, however, that regulators' demands could be met through the conversion of preferred to common shares. Citi made such a move earlier this year, although it is dilutive to existing common shareholders.