Updated from 1:38 p.m. EDT

Financial stocks were rallying Tuesday, after embattled Citigroup ( C) said it was having its best quarter in more than a year.

Citi CEO Vikram Pandit said in an internal memo late Monday that the company has been "profitable" through the first two months of the year and is having the "best quarter-to-date" since the third quarter of 2007.

Also giving a lift to stocks was news that Rep. Barney Frank (D., Mass.) said the uptick rule, which prevents investors from selling stocks short while the price is declining, could be reinstated soon.

Citi shares were rising 36.2% to $1.43. Bank of America ( BAC) shares were up 26.1% to $4.73. JPMorgan Chase ( JPM) shares were rising 20% to $19.08. Wells Fargo ( WFC) shares were lifting 15.4% to $11.69.

The NYSE Financial Sector Index was rising 14.2% to 2,409.81.

MGIC ( MTG) was one of the few losers among financial stocks. The mortgage insurer was falling 20.1% to $1 after smaller rival Radian Group ( RDN) said in a regulatory filing that some mortgage borrowers may intentionally default on loan payments to take advantage of certain government programs.

Radian shares were up 24.1% to $1.39, as it said it was exploring capital raising options, including selling its share in asset and servicing firm Sherman Financial.
This article was written by a staff member of TheStreet.com.

If you liked this article you might like

Citigroup Gives CEO Corbat 48% Pay Raise as Profitability Misses Goal

Citigroup Gives CEO Corbat 48% Pay Raise as Profitability Misses Goal

Worst-In-Class Goldman Sachs CEO Blankfein Gets 9% Pay Raise

Worst-In-Class Goldman Sachs CEO Blankfein Gets 9% Pay Raise

Here's One Hint That S&P 500 Stocks Are a Screaming Buy

Here's One Hint That S&P 500 Stocks Are a Screaming Buy

Federal Reserve Who? Stocks Have Historically Done Great With Rising Rates

Federal Reserve Who? Stocks Have Historically Done Great With Rising Rates

JPMorgan, Bank Stocks Have Room to Run Higher in Slow-Motion Economy

JPMorgan, Bank Stocks Have Room to Run Higher in Slow-Motion Economy