Sovereign Bancorp shares continue climb

Shares rose 87 cents, or 22 percent, to close at $4.82. Shares jumped about 70 percent on Tuesday to close at $3.95, following the announcement of the management change.

Chief Executive Perrault, 57, replaced Joseph P. Campanelli, who the bank said is leaving to pursue other family and business interests. While Campanelli had been credited for improving transparency and disclosure with Wall Street, Sovereign's stock price has declined to record lows amid fears about instability in the banking sector. Shares are down 65 percent for the year to date.

The upcoming Senate vote on a revived $700 billion bailout package also helped buoy financial stocks on Wednesday.

The legislation under consideration, to be voted on Wednesday night, still centers on the government's ability to buy bad mortgages and other debt from ailing financial institutions.

Late Tuesday, Moody's Investors Service lowered the investment-grade debt and deposit ratings of Sovereign and its subsidiaries, and placed all ratings on review for possible further downgrade.

The ratings action is based on the significant charges that the company will take from its exposure to Fannie Mae and Freddie Mac preferred securities, Moody's said, as well as the loss taken on the sale of its $750 million collateralized debt obligation portfolio. Moody's expects these charges to put a strain on the Philadelphia-based bank's capital position.