Updated from 2:42 p.m. EST
Financial stocks were on the rise Tuesday afternoon, buoyed by
Chairman Ben Bernanke's testimony on Capitol Hill.
told the Senate Banking Committee that the economy was suffering a "severe contraction," but expressed hope the recession would end this year if the federal government could restore order to the financial markets and get banks lending normally again.
The NYSE Financial Sector Index recently was rising 8.4% to 2,623.21, as several financial components of the
Dow Jones Industrial Average
were on the rise.
Bank of America
shares rose 21% to $4.73.
added 12.1% to $13.62. Citigroup added 21.5% to $2.60.
One outlier, however, was troubled insurer
American International Group
. Late on Monday,
said that it is discussing "alternative options" with regulators to keep the firm afloat as it navigates through the financial crisis.
reported the bank could report a $60 billion loss next week. Shares fell 22.6% to 41 cents.
Shares of financial guarantor
rose 0.3%, as the company announced its board had adopted a "say on pay" policy allowing shareholders to vote on certain executive compensation positions. The three elements shareholders will vote on include CEO and senior executive compensation and "extraordinary" compensation awards. MBIA shares were up a penny to $3.44.
shares jumped 7.7% after the company said it was cutting its dividend 86% to 5 cents to preserve capital as a "precautionary measure." Shares traded to $21.02.
Commercial lender CIT Group
also rose 18.4% to $2.06.
This article was written by a staff member of TheStreet.com.