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Tuesday's Bank Stocks: Sector moves higher despite broader woes

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Tuesday's Bank Stocks: Sector moves higher despite broader woes

Bank and thrift stocksadvanced during trading Tuesday, Oct. 4, leaving behind broader markets thatslumped to a lower close.

The SNL U.S. Bank Indexgained 0.73% to 414.61, and the SNL U.S. Thrift Index rose 0.22% to 823.66.

Wider markets openedhigher but steadily gave up ground throughout the session and finished innegative territory. Volatility in oil prices and a growing belief that theFederal Reserve remains intent on moving interest rates higher before the endof the year may have contributed to the day's selling, FTN Financial economistJay Morelock said. He noted that some futures and other markets reflectedhigher chances of a Fed rate hike in December after Federal Reserve Bank ofRichmond President Jeffrey Lacker spoke in the morning.

Lacker argued in favorof "pre-emptive increases in the federal funds rate" to help controlinflation, and also said the current fed funds rate "is extremelylow" when compared with previous policies he said had succeeded in keepinginflation in check as the Fed moved into previous tightening cycles.

"That's sort ofwhat set the tone ... the Fed wants to move that probability up higher by theend of the year so they have a window to hike rates," Morelock said.

The Dow Jones IndustrialAverage fell 0.47% to 18,168.45, the S&P 500 retreated 0.50% to 2,150.49,and the Nasdaq composite index shed 0.21% to 5,289.66.

The industry's biggestnames mostly moved higher during the session, however, as gained 1.53% to $47.75,Bank of America Corp.added 1.09% to $15.80, JPMorganChase & Co. climbed 0.86% to $66.60 and U.S. Bancorp rose 0.45% to $42.85.

Shares of slipped 0.18%to $43.75 as the fraudulent-account crisis at the bank widened. Sen. DavidVitter, R-La., reportedly said in a letter to Wells Chairman and CEO JohnStumpf that more than 10,000 small business accounts were also by fraudulent activityat the bank. Vitter chairs the Senate's committee overseeing small business.

Additionally, Sen.Sherrod Brown, D-Ohio, said he and other lawmakers plan to introduce a billthat would ban thecompany from using forced arbitration clauses, and make it easierfor customers to file lawsuits against the bank.

Democratic presidentialnominee Hillary Clinton blasted the bank during a campaign stop, saying it hadbullied employeesinto committing fraud.

shares rose 2.19% to$71.35, and SunTrust BanksInc. added 2.19% to $44.73.

In economic data news,U.S. home prices, including distressed sales, 6.2% year over year in August,according to CoreLogic's latest home price index. Compared to July, homeprices, including distressed sales, increased 1.1%

Among thrifts,New York Community BancorpInc. rose 0.07% to $14.07, and TFS Financial Corp. (MHC) was up 0.22% to $17.84.

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