Sector Snap: Banks Rise After Sector Upgrade

NEW YORK (AP) — The banking sector got a boost Monday after Goldman Sachs Group Inc. raised its view on large banks to "Attractive" from "Neutral," saying they are on relatively better footing than regional banks.

In a research note, Goldman analysts wrote that investors have failed to recognize the relative strength of large banks such as JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co., compared with regional banks. The difference in earnings power has yet to be reflected in share prices, the note said.

Bank shares have surged during the market's recent rally. Some banks touched near-historic lows in early March.

The positive overall view on banks helped bolster the entire sector Monday. The KBW Bank Index, which tracks 24 of the nation's largest banks, rose 2.2 percent in afternoon trading. The index has more than doubled since it bottomed in early March.

Because of long-term deals completed at low prices during the market's downturn, national banks have increased their earnings power, Goldman said. The analysts pointed to transactions like Wells Fargo's purchase of Wachovia Corp. and JPMorgan Chase's purchase of Washington Mutual as cheap acquisitions that add to the banks' asset bases.