Updated from 11 a.m. EDT

When it comes to sparking a rally on Wall Street, maybe the top brass at

J.P. Morgan Chase

(JPM) - Get Report

are a bit more persuasive than President Bush and Alan Greenspan.

Shares of J.P. Morgan and other financial companies on Wednesday propelled the stock market to its best one-day performance in 15 years. In fact, J.P. Morgan, which rose $3.22, or 16%, was the top performing stock in the

Dow Jones Industrials


Investors rushed to buy shares of the nation's second-largest bank after J.P. Morgan executives strongly defended its financing dealings with Enron. The executives argued their case during a hastily arranged premarket conference call, following a massive selloff in shares of both J.P. Morgan and


(C) - Get Report



"The trading price of the stock is based on an overreaction to what are perceived liabilities, and we don't think those liabilities are as much as they are feared to be," said Marc Shapiro, vice chairman of the nation's second-largest bank. "We are cooperating with all investigations. We think we acted properly and we think the facts will bear that out."

Over the past two days, both big banks had lost more than $54 billion in market capitalization following a drumbeat of questions about some $8 billion in complicated financing deals the two banks arranged from Enron. On Tuesday alone, shares of J.P. Morgan fell 18% to $20.08.

But one day later, J.P. Morgan made back almost all of Tuesday's losses, closing at $23.30. Citigroup, which plunged $16 on Tuesday, rose $2.59, or $9.59, to $29.59. The Philadelphia KBW Bank Index rose 6.51%, slightly better than the Dow Jones' 6.35% gain.

It Worked

As a public relations offensive, it's clear the J.P. Morgan conference call was a smashing success. But it's not clear yet whether today's rally has quelled investor concerns about the role J.P. Morgan and Citigroup may have played in the collapse of Enron.

Congressional leaders, during an all-day hearing Tuesday, accused both banks of assisting Enron in trying to conceal some of its debt and artificially boosting its cash flow. The allegations are sparking fears among investors that the banks could face potentially massive civil liability and possibly even criminal prosecution.

Bank executives from Citigroup and J.P Morgan denied the allegations at the hearing. And Shapiro and J.P. Morgan Chairman and Chief Executive William Harrison reiterated that contention again during the conference call. They said all the transactions -- so-called prepay deals -- had been reported on both J.P. Morgan and Enron's balance sheets as wither trading transactions or trading liabilities.

"My belief is that we acted properly and with integrity in all the Enron matters and that we have not knowingly assisted Enron or any company in that matter in knowingly misrepresenting the facts in their financial records," says Harrison.

Slide Rule

Both executives said structured finance deals such as the prepay deals in question often are confusing and difficult to comprehend. And they expressed some frustration with all the confusion that had been created about those transactions by what Harrison called "a highly publicized media event in Washington." It was an obvious reference to the hearings held by the Senate Permanent Subcommittee on Investigations.

The bank executive also denied rumors that had been circulating in the market that the bank was facing a liquidity crisis and potentially massive trading losses and exposure in its derivative transactions.

"We have ample liquidity, probably more than we've had in the history of the company," Shapiro said.

Both Harrison and Shapiro said they planned to be buying shares of the bank's stock in the open market as a sign of confidence in the lender.