Bank stocks closed higher Wednesday, Sept. 28, after FederalReserve Chair Janet Yellen's testimony before the House Financial Services Committee.
"I think the most important thing in this speech is theeffort by Fed Chair Janet Yellen to lay the groundwork for a rate hike mostlikely in December," said David Jones, head of DMJ Advisors. "Thespeech serves as an indicator that, in fact, we will see a rate hike," helater added.
Jones also noted that the International Monetary Fund todaysuggested that the economy is not strong enough for a rate hike. He thinks thatthe statement might make the Fed even more determined to move interest ratesbased on domestic conditions independently of what the IMF may be recommending.
Furthermore, Yellen noted that the Fed wants to make surethat the job market expansion is sustainable over the medium term. "If weallow the economy to overheat we could be faced with having to raise interestrates more rapidly than we would want." Jones added that the Fed considersimprovements in labor markets conditions as the best indicator justifying itsnormalization process.
In other news, the Mortgage Bankers Association reportedthat mortgage applicationswere down 0.7% from a week ago on a seasonally adjusted basis for the weekended Sept. 23.
By the end of the business day, the SNL U.S. Bank Indexincreased 0.63% to 413.56 and the SNL U.S. Thrift Index slid 0.05% to 828.81. The Dow Jones Industrial Average added0.61% to 18,339.24, the S&P 500 advanced 0.53% to 2,171.37 and the Nasdaqcomposite index grew 0.24% to 5,318.55.
Wells Fargo& Co. added 0.49% to $45.31. The company disclosed Tuesday thatChairman and CEO John Stumpf will forfeit about $41 million in unvested equity awards. Hewill also forgo his salary during the independent directors' investigation intothe company's retail banking sales practices and related matters, and will notreceive a bonus for 2016.
JPMorgan Chase& Co. increased 0.53% to $66.71, went up 0.59% to$15.38 and CitigroupInc. rose 1.08% to $46.87.
Among notable movers, Nashville, Tenn.-based added 3.98% to $17.00 after announcing the close of its IPO, and Shippensburg, Pa.-based lost 4.16% to $20.94.
In the thrift space, BofI Holding Inc. tumbled 5.46% to $21.64, slid 0.62% to $14.42, and AstoriaFinancial Corp. decreased 1.01% to $14.69. advanced0.17% to $17.94.
Market prices andindex values are current as of the time of publication and are subject tochange.