Sector Snap: Shares of regional banks soar

Stocks plummeted Monday after the government's proposed $700 billion financial rescue package failed to win approval in the House of Representatives, heightening concerns on Wall Street about the stability of the financial system.

Without a bailout plan in place, questions lingered about how ailing banks are going to handle mounting losses tied to bad mortgage debt.

The proposal would have allowed the government to buy bad mortgages and other deficient assets held by troubled financial institutions.

Even as concerns about the failed bailout persisted, Wall Street was encouraged by an unexpected increase in consumer confidence in September. The Conference Board, a private research group, said Tuesday its Consumer Confidence Index rose to 59.8 from a revised 58.5 in August. Wall Street had expected a reading of 55.5, according to Thomson/IFR.

Among the sector's biggest advancers Tuesday afternoon were National City Corp., which surged 46 cents, or 33.8 percent, to $1.82, and First Horizon National Corp., which jumped $2.26, or 31.2 percent, to $9.51.

Fifth Third Bancorp, meanwhile, rose $2.75, or 30.1 percent, to $11.86.

Regions Financial Corp. spiked $2.35, or 28.5 percent, to $10.60, while BB&T Corp. gained $6.77, or 21.8 percent, to $37.77.

KeyCorp added $1.58, or 16.1 percent, to $11.38. Marshall & Ilsley Corp. advanced $2.75, or 15.3 percent, to $20.75.

M&T Bank Corp. jumped $10.46, or 13.1 percent, to $90.46.