NEW YORK ( TheStreet) -- Banks rallied sharply on Tuesday amid optimism that the Federal Reserve will unveil additional stimulus measures on Wednesday. Shares of Bank of America ( BAC) surged more than 4% to $8.11. Citigroup ( C) and Wells Fargo ( WFC) climbed 3.5% and 1.5% respectively. Shares of JPMorgan Chase ( JPM) gained 2.5%. CEO Jamie Dimon appeared before the House Financial Services Committee to discuss the firm's over $2 billion trading loss. Dimon stuck largely to the same script he followed last week when appearing before the Senate Banking Committee, though the session was decidedly more combative. Dimon faced some pointed questions on the bank's disclosure of changes to its risk model, after SEC Chairwoman Mary Schapiro said the regulator was investigating whether JPMorgan misled investors by failing to disclose a change in the Value at Risk model the firm had adopted for its CIO unit. "We disclosed what we knew when we knew it," Dimon told the House Financial Services Committee. Shares of Berkshire Hathaway ( BRK.B) ticked up 1% after it was named lead bidder for Residential Capital's loan portfolio in a bankruptcy court auction. Shares of Lazard ( LAZ) gained more than 6%, building on a 5% gain Monday, after Nelson Peltz disclosed a 5.1% stake in the company. Jefferies ( JEF) said second quarter profit declined 21% amid a "challenging market environment". For the quarter ended May 31, the New York bank earned $63.5 million, or 28 cents per share, down from $80.6 million, or 36 cents per share, in the same quarter last year. Excluding items related to employee compensation, acquisitions and other items, the company said it posted an adjusted profit of 31 cents per share for the recent quarter. Analysts expected earnings of 26 cents per share, according to FactSet. Shares finished marginally lower at $13.08. -- Written by Shanthi Bharatwaj in New York
Steve Ricchiuto, MZUHO Securities chief economist, and Bob Michele asset management global CIO with JP Morgan (JPM), joined BloomberTV's 'Bloomberg GO' to discuss the economy and the Fed raising rates.