Banks Bounce Back, Modestly: Financial Winners

NEW YORK ( TheStreet) -- Bank stocks staged a modest recovery on Wednesday, after taking their worst pounding in over two years in yesterday's session.

The KBW Bank Index ( I:BKX) rose just 0.1% to close at 62.45 though all but eight of the 24 index components ended with gains. The broad indices fared better. The Dow Jones Industrial Average and S&P 500 ( SPX.X) ended with gains of 0.3% while the NASDAQ Composite posted an increase of 0.4%.

Among large U.S. banks, the winner was New York Community Bancorp ( NYCB) as shares advanced 1.4% to close at $14.96. With a quarterly payout of 25 cents, New York Community has one of the highest dividend yields on common shares in the banking industry with a yield of 6.68%.

Large banks that recorded gains close to 1% included Commerce Bancshares ( CBSH) of Kansas City, Mo., which closed at $44.02; First Niagara Financial Group ( FNFG) of Buffalo, N.Y., closing at $10.38; and Zions Bancorporation ( ZION) of Salt Lake City, which ended the session at $28.16.

Shares of JPMorgan Chase ( JPM) were down only two cents to $50.58 despite continued flow of leaks from federal regulators about large fines the company is facing.

Housing Drags on Rising Rates

Following Tuesday's fear over the buildup to possible military action against the government of Syria by the United States and its traditional allies, financial names were stalled by mediocre housing data, declining refinance applications and an inventory shortage in several major markets.

The Mortgage Bankers Association on Wednesday said its Market Composite Index for the week ended Aug. 23 was down 2.5% from the previous week. The Market Composite index measures total residential loan application volume.

The MBA's Refinance index was down 5% from the previous week, and was down over 64% from its peak early in May.

The average rate for a conforming 30-year fixed-rate mortgage loan during the week ended Aug. 23 was 4.8%, rising sharply from 4.7% the previous week. A "conforming" mortgage loan is one that meets the basic underwriting of Fannie Mae and Freddie Mac, with a loan-to-value ratio of 80% or lower, and a principal balance of $417,000 or less. Rates on conforming mortgage loans hit their highest level since April 2011.

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