Shares of major banks in the U.S. rose early Wednesday pulling up the financial sector on optimism that President Barack Obama's administration may go ahead with a plan to buy bad assets in the financial system creating the so-called bad bank.
Reports Wednesday said the Federal Deposit Insurance Corp. could be the one to manage the bad bank plan. It is estimated that the total worth of bad assets taken by the government could be $1 trillion, according to Marketwatch.
The Financial Sector SPDR (XLF) which tracks the S&P 500 financial stocks, gained 9 percent early morning Wednesday.
Among banking stocks, Bank of America rose 18.15 percent, Citigroup shares rose 19.15 percent , JPMorgan Chase & co. rose 9.18 percent and Wells Fargo was up 24.64 percent.
Also Wednesday, Obama said he is confident that the $825 billion economic stimulus package proposed by Democratic House leaders will be approved in the Senate, as the government moves quickly to restore economic stability.