(Updated with final stock closing prices throughout, added news on CIT Group talks.) Financial stocks rallied strong Wednesday, with JPMorgan Chase ( JPM) among the winners ahead of its quarterly earnings release on reports the bank has taken a tougher stance with the government. Since repaying $25 billion in funds borrowed under the Troubled Asset Relief Program, or TARP, JPMorgan has taken a tougher stand against the government, according to a report Wednesday in The Wall Street Journal. JPMorgan has stepped up its opposition to the government's proposed legislation on derivatives and has told the Treasury Department it is fed up with haggling over the value of warrants that the government holds in the bank, according to the report. JPMorgan CEO Jamie Dimon is taking issue with portions of the White House's financial plan that deals with the regulation of derivatives, the Journal reported.
In a research note Wednesday, Rochdale Securities analyst Dick Bove said JPMorgan's push against the government's regulation plans is "very important for this bank and the industry." "The rules being proposed would cripple the American banking system and turn the country into a third-rate financial power," Bove wrote. "It is time for a credible spokesperson to point out how very bad these proposals are. Mr. Dimon may be the only banker in the nation able to do this...This is critically important for JPMorgan , banking, and the U.S financial system." Bove also said JPMorgan, which reports quarterly results ahead of Thursday's opening bell, may very well beat Wall Street's expectations, as Goldman Sachs ( GS) did Tuesday. However, Bove opted not to change his earnings estimates for the bank as the report is less than a day away.