NEW YORK (
) -- Bank stocks were sailing higher Tuesday on the heels of positive economic news regarding housing and consumer strength.
The KBW Bank Index, which tracks 24 large-cap banks, was up 1.4% by midafternoon at 43.58, having hit a high of 43.69 earlier in the session. The index's largest components,
Bank of America
, were all tracking higher, up 0.3% to 2.2%.
Bank of America, JPMorgan and Citi were among the most actively traded issues on the New York Stock Exchange.
Some large regional bank components were also rising, with continued speculation on potential M&A.
was up 3.4% at $34.56;
was climbing 1.5% at $5.32.
Marshall & Isley
( MI) was up 1.1% at $6.45;
was up 1.1% at $6.47; and
was up 0.6% at $85.42.
Earlier in the day, new data from the Standard & Poor's/Case-Shiller home price index showed that home prices in 20 cities had risen 1% in June on a monthly basis, and 4.2% from the year-ago period. It's the third month of increased prices, spurred by a tax credit that expired in April.
Also on Tuesday, the Conference Board said its consumer confidence index took a surprising leap, despite ongoing concerns about the economy.
JPMorgan was up 2.2% at $36.62. The bank struck some seemingly precocious deals with regulators when acquiring
, which has limited its exposure to repurchasing low-quality mortgages from private investors and
. A column in
The Wall Street Journal
highlighted the issue, pointing out that Bank of America and Wells Fargo don't appear to have the same benefit. As mortgage-repurchasing requests have surged, it's caused more concern for investors worried about banks' loan books.
Still, Bank of America and Wells Fargo were both up 0.9% at $12.43 and $23.46, respectively. All three stocks are well below their 52-week highs of $48.20 for JPMorgan, $19.86 for BofA and $34.25 for Wells.
Recently, buzz has built up about the two banks' success in building out capital markets activities. Bank of America is earning more money from its BofA-Merrill brokerage division than
, as a
article pointed out, even though it has far fewer advisers.
Wells Fargo also appears to be getting more aggressive with its own
investment banking franchise, which grew as a result of the Wachovia merger. The company has been hiring more staff and dipping further into various capital-markets businesses where it sees opportunity, including residential- and commercial-mortgage securitization and derivatives. Unlike other banks that are established players in the market, Wells Fargo has the benefit of starting fresh to structure its strategies around financial reform.
Elsewhere in the financial-services sector,
American International Group
faced another setback in trying to divest assets in order to repay its bailout tab. Taiwan regulators have rejected its $2.15 billion deal to sell its Nan Shan life-insurance subsidiary to a group of private investors.
AIG's shares were down 0.9% at $33.69 in recent trading.
--Written by Lauren Tara LaCapra in New York.
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