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Tuesday's Bank Stocks: Consumer numbers boost markets, banks notch gains


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Tuesday's Bank Stocks: Consumer numbers boost markets, banks notch gains

Bank and thrift stocks notched gains and broader marketsadded gains throughout the session to close higher Tuesday, Sept. 27.

The SNL U.S. Bank Index rose 0.90% to 411.27 and the SNLU.S. Thrift Index added 0.67% to 829.22.

The illegal-account opening scandal at  continuedto dominate headlines in the banking industry as the company was hit with awave of potential new problems. The U.S. Department of Labor's Wage and HourDivision has begun a review of the company's labor practices, with LaborSecretary Thomas Perez in a letter to senators a "top-to-bottom"review of complaints or alleged breaches at the company in recent years.

Additionally, former employees filed a second against the bankalleging that they were wrongfully terminated for failing to meet their salesquotas, which have been scrutinized as a major contributing factor to thecrisis engulfing the banks. Despite those headlines, shares in the company rose0.47% to $45.09.

The industry's other biggest names also advancedduring the day, with Bank ofAmerica Corp. adding 1.33% to $15.29, closing 1.05% higher at$46.37, and JPMorgan Chase &Co. 0.88% higher to $66.36 at the close.

Capital One FinancialCorp. shares added 1.40% to $71.80 and rose 1.01% to $42.90.

Bank of NewYork Mellon Corp. was a lone laggard among major banks, as itsshares slipped 0.13% to $39.50.

Broader markets also moved higher throughout the day,as the Dow Jones Industrial Average rose 0.74% to 18,228.30, the S&P 500advanced 0.64% to 2,159.93 and the Nasdaq composite index climbed 0.92% to5,305.71.

James Paulsen, the chief investment officer with WellsCapital Management, said that although much of the early morning news wasfocused on dissecting the Sept. 26 presidential debate, a pair of economicreports drove the broader market gains today, particularly the release of consumerconfidence numbers that were higher than expected, with The Conference BoardConsumer Confidence Index reaching 104.1 in September, up from 101.8 in August.The Present Situation Index rose to 128.5 in September from 125.3 the previousmonth, and the Expectations Index increased to 87.8 in September from 86.1 inAugust.

"The only thing really kind of holding [the U.S.economy] up in the last year or year and a half has been the consumer ... so itwas really encouraging to see that number pop back up in a big way,"Paulsen said.

Neil Shankar, an economist with TD, added: "That's what bid up themarket throughout the day, and almost all of the details of the report wereupbeat as well, so that's a really positive forward-looking indicator."

The S&P CoreLogic Case-Shiller U.S. National Home Price NSAIndex, covering all nine U.S. census divisions, saw a 5.1% annual  in July. The10-city composite posted a 4.2% annual increase, down from 4.3% the previousmonth, while the 20-city composite reported a 5.0% year-over-year gain, downfrom 5.1% in June.

Among thrifts, edgedup 0.21% to $14.51 and TFS FinancialCorp. (MHC) climbed 0.73% to $17.91.

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