Stocks held gains on Friday after the government released a much anticipated concept paper on stress tests for the 19 biggest U.S. banks.
The U.S. Federal Reserve said on Friday that the top 19 U.S. banks need to hold a substantial amount of capital above regulatory requirements to weather a potential worsening of the economic recession.
This is about as anti-climatic as it gets. This is not giving us any direction at all, said Peter Kenny, Managing Director at Knight Equity Markets in Jersey City, New Jersey.
This is very, very basic, You come out of this knowing that the banks have to build up a buffer (for) a tighter, more challenging credit market. They do that anyway.
Stocks has already posted strong gains leading up to the stress test paper's release on better-than-expected results from companies, including American Express
The Dow Jones industrial average <.DJI> climbed 127.43 points, or 1.66 percent, to 8,084.49. The Standard & Poor's 500 Index <.SPX> gained 14.31 points, or 1.68 percent, to 866.23. The Nasdaq Composite Index <.IXIC> advanced 37.90 points, or 2.29 percent, to 1,690.11.
The KBW Bank index <.BKX> rose 3.3 percent while the Select Sector SPDR Financial ETF
(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)