Updated to note Tuesday's rally in the financial stocks. NEW YORK (TheStreet) -- Such courage was in short supply at the time but the fearless investor choosing to buy into the big banks while the markets were in freefall a year ago would by far have done best with Bank of America (BAC).
The banks have bounced back somewhat following their weakness in the wake of the fourth-quarter reports, and are currently outperforming the broad market in 2010. Following Monday's close, the Dow Jones Industrial Average was up 1.2%, while the KBW Bank Index ( BKX) had tacked on nearly 5%. If first-quarter numbers fall short and the executive commentary is cautious, the tempered optimism that's brought the stocks this far could run out. Then again, financial stocks surged on Tuesday with formerly embattled names like Citigroup and American International Group ( AIG) led the charge. If Wall Street truly believes these companies, which are still dealing with significant levels of government involvement, have started to turn a corner then shares of the rest of the group stand to benefit as well. -- Written by Michael Baron in New York.