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Tuesday's Bank Stocks: Sector rises amid broader advance

Bank stocks notched gains amid the earnings reporting season Tuesday, Jan. 24, as broader markets spent the day in positive territory and closed higher.

The SNL U.S. Bank Index rose 1.57% to 529.35 and the SNL U.S. Thrift Index gained 1.18% to 950.14.

Wider markets steadily climbed to gains on the day, rebounding from a lower close during the first trading session of the week. Back-and-forth in markets will likely continue as investors continue to watch for more developments from President Donald Trump's administration on a wide range of issues, according to Raymond James Chief Economist Scott Brown. "We're going to see this kind of choppiness for a while, until we get more clear indicators about policy from the new administration," Brown said during an interview.

The Dow Jones Industrial Average added 0.57% to 19,912.71, the Nasdaq composite index jumped 0.86% to 5,600.96, and the S&P 500 advanced 0.66% to 2,280.07.

Earnings season continued in the banking industry, with Fifth Third Bancorp reporting fourth-quarter 2016 net income available to common shareholders of $372 million, or 49 cents per share. The company saw loan balances decrease during the period as it looks to improve equity returns and as part of a larger effort to de-risk its loan portfolio and exit certain loans relationships. Shares in the company edged up 0.38% to $26.60 on the day.

Shares of Hato Rey, Puerto Rico-based Popular Inc. rose 2.17% to $45.13, after the company reported a net loss applicable to common stock of $5.0 million, or 6 cents per share, for the 2016 fourth quarter. The company attributed the loss to a $116.8 million FDIC arbitration charge.

The industry's biggest players pushed higher amid the broader rally, with Bank of America Corp. surging 1.73% to $22.95 and Citigroup Inc. climbing 1.90% to $56.74. JPMorgan Chase & Co. added 1.21% to $84.72, Wells Fargo & Co. shares were up 0.83% to $54.70 at the close of trading and State Street Corp. was up 2.49% to $80.52.

Simmons First National Corp. shares rose 1.24% to $61.40 on the day after the Pine Bluff, Ark.-based company announced an agreement to buy Fort Worth, Texas-based First Texas BHC Inc. in a deal valued at about $462 million.

In economic news, total existing home sales finished 2016 at 5.45 million sales. Existing sales decreased 2.8% to a seasonally adjusted annual rate of 5.49 million in December 2016 from an upwardly revised 5.65 million in November 2016. After the December dip, sales are only 0.7% higher than a year ago, according to the National Association of Realtors.

That monthly decline and the far from strong yearly sales number likely registered little with market participants, according to Brown, who argued market moves are being driven primarily by expectations of a much different economic environment moving forward.

"We're not seeing any reaction at all to the economic data; it seems irrelevant to the market at this point. For the most part investors are looking at the economy ahead of us and not behind, so there's going to be a lot of discounting of whatever economic data we see," Brown said.

Among thrifts, New York Community Bancorp Inc. gained 0.75% to $16.14 and TFS Financial Corp. (MHC) shares added 0.27% to $18.30.

Market prices and index values are current as of the time of publication and are subject to change.