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Tuesday's Bank Stocks: Financials rise as GOP reports progress on tax reform

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Tuesday's Bank Stocks: Financials rise as GOP reports progress on tax reform

Bank stocks ended the day slightly higher Dec. 12 as investors prepared for a likely interest rate hike announcement from the Federal Reserve and GOP tax negotiations appear to be looking up.

The SNL U.S. Bank Index gained 1.15% to 618.95, while the SNL U.S. Thrift Index climbed 0.26% to 939.84. The S&P 500 rose 0.15% to 2,664.11, the Dow Jones Industrial Average improved 0.49% to 24,504.80 and the Nasdaq Composite Index slipped 0.19% to 6,862.32.

The moves come as the Federal Open Market Committee kicked off two days of meetings, which are expected to end in an announcement that the Fed will raise interest rates for the third time this year.

Art Hogan, chief market strategist at Wunderlich Securities, said the announcement Dec. 13, along with updated economic projections from Fed officials, will be a major factor driving bank stocks tomorrow.

But today's movement, he said, was largely driven by Republicans reportedly coming closer to a tax reform agreement that would resolve differences in bills passed by the House and Senate. The Washington Post reported, for example, that GOP lawmakers are in "advanced talks" and narrowing in on some points of agreement, including lowering the corporate tax rate to 21% and changing the mortgage interest deduction cap to $750,000.

"I really think it's a direct reflection of the prospects for tax reform getting accomplished," Hogan said of the rise in bank stocks.

Wells Fargo & Co. led the Big Four today, closing up 2.48% to $60.33. Bank of America Corp. gained 1.31% to $29.32, JPMorgan Chase & Co. was up 1.16% to $106.85 and Citigroup Inc. improved 0.40% to $76.15.

Major movers today included Independent Bank Corp., which was up 2.44% to close at $23.10, and Fulton Financial Corp., which advanced 2.24% to $18.25.

TriCo Bancshares, meanwhile, slipped 3.6% to $39.85 as investors were sour on the cost of its proposed acquisition of FNB Bancorp, which was up 6.42% and ended at $37.95.

S&P Dow Jones Indices and S&P Global Market Intelligence are owned by S&P Global Inc.

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