Updated from 1:33 p.m. EDT

Most bank stocks finished higher Thursday on yet another bullish research note that said financial stocks could lead the way out of the global slump.

Anthony Bolton, the U.K.-based president of investments at Fidelity International, said that the recent gain in equities was a bull market move and not a bear market rally. Bolton said that he favors financials and that the sector, along with technology and consumer cyclical names, could spur a recovery.

Bolton's comments come a day after Fox-Pitt Kelton analysts upped the firm's rating on the banking industry to marketweight from underweight, the first time the firm has raised its rating on U.S. banks since 2004.

HSBC Holdings ( HBC) added 3.9% to close at $35.60, shares of Bank of America ( BAC) increased 2.9% to $8.93, Morgan Stanley ( MS) was higher by 2.5% to $23.64, and Wells Fargo ( WFC) shares climbed 0.2% to $20.01.

However, not all banks closed higher. Citigroup ( C) shares shed 2.2% and JPMorgan Chase ( JPM) fell 4.3%.

Speaking of Bank of America, news surfaced late Wednesday that CEO Ken Lewis was stripped of his chairman title, losing by a narrow margin in the shareholder vote. Director Walter Massey was chosen to replace Lewis as chairman, though Lewis will maintain his positions as president and CEO, the company said.

American Express ( AXP) shares finished higher even after Standard & Poor's Ratings cut its ratings on the credit card issuer by two notches to BBB+ from A.

S&P cited expectations for continued credit deterioration and concerns over the company's reliance on retail deposits as its main source of funding. Still, American Express rose 1.1% to $25.22.

Elsewhere, Freddie Mac ( FRE) shares reversed early losses and finished higher by 1.3% after The Wall Street Journal reported that the company is under investigation by the FBI on possible accounting violations that enabled Freddie to defer billions of dollars of losses incurred from 2001 through 2004.

The losses, currently about $3.7 billion, are due to be gradually recognized in quarterly earnings statements over the next several years, the Journal noted.

Shares of Royal Bank of Scotland ( RBS) surged 13.3% to close at $12.24 after saying it will sell its stake in Spanish car insurance unit Linea Directa Aseguradora to Bankinter for 426 million euros, or $565 million.

In other financial-related news, the Treasury Department said it has received more than 100 applications from potential fund managers interested in participating in the Legacy Securities portion of the Public Private Investment Program, or PPIP.

A variety of institutions applied, including traditional fixed income, real estate and alternative asset managers, the Treasury said. At least five will get preliminary approval by May 15, and once a fund receives preliminary qualification, it can begin raising the minimum of $500 million in private capital that will serve as the investment that, pending further approval, will be matched with taxpayer funds.

Meanwhile, Bloomberg reported that the Federal Deposit Insurance Corp. may allow investors to buy bank assets in the PPIP without sharing an equity stake with Treasury, citing people familiar with the matter. No final decision has been made yet, according to the report.

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