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Bank Stocks Soar on Senate Deal News (Update 1)

"But for today, the relief we hope for is to reopen the government, avoid default, and protect the historic cuts we achieved under the BCA," McConnell concluded. "This is far less than many of us had hoped for. But it's far better than what some had sought."

The Senate's legislation will next be sent to the House of Representatives, after which it may be sent back to the Senate with demands for changes.

The Dow Jones Industrial Average and S&P 500 (SPX.X) ended with gains of 1.4%, while the NASDAQ Composite advanced by 1.2%. The KBW Bank Index (I:BKX) rose over 2% to 64.70, with all 24 index components showing gains, except for Bank of New York Mellon (BK - Get Report), which was down slightly to close at $30.78.

BNY Mellon early on Wednesday reported a 7% sequential decline in revenue for the third quarter, although the company also reported operating earnings of 60 cents a share, which came in ahead of the consensus 58-cent estimate among analysts polled by Thomson Reuters.

Shares of JPMorgan Chase (JPM - Get Report) rose 3.3% to close at $54.05, after the nation's largest bank entered into a $100 million settlement with the Commodities Futures Trading Commission springing from last year's "London Whale" hedge trading losses.

Bank of America's (BAC - Get Report) stock was up over 2% to close at $14.56, after the company reported third-quarter earnings of $2.5 billion, or 20 cents a share, coming in slightly behind the consensus EPS estimate of 21 cents.

Bank of America continued the trend of weak third-quarter trading revenue for major U.S. banks, and also reported a rise in legal expenses.

Please see the links below for extensive coverage of the flurry of bank earnings announcements on Wednesday.

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-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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