Sector Wrap: Regional bank shares advance

Marshall & Ilsley Corp. also beat Wall Street's expectations, despite reporting a hefty provision for loan losses during the quarter. The bank's shares shot up $2.01, or 17.3 percent, to close at $13.60. Shares have traded between $10.90 and $37.44 in the past 12 months.

Regional bank stocks have had a rocky few days, beginning with a sharp dive on Monday as investors worried about the prospect of more bank failures after the government's takeover of IndyMac Bancorp Inc. late Friday. Concern over the fate of mortgage financiers Fannie Mae and Freddie Mac also weighed on the market, after the Federal Reserve and the Treasury said they would lend financial support to the firms if necessary.

Among the gainers were Keycorp, which rose $1.37, or 16.4 percent, to $9.74, and National City Corp., which added 80 cents, or 22.2 percent, to $4.40.

Financial stocks have also been vulnerable as earnings season heats up, and Wall Street braces for more bad news.

But some stocks in the sector pared their losses Tuesday, as the dust around IndyMac's failure began to settle, and the ascent continued in Wednesday's session.

Also joining in the rally were Zions Bancorp, which rose $4.27, or 22.2 percent, to end at $23.54, and First Horizon National Corp. gained $1.61, or 27.3 percent, to $7.50.