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The Dow and S&P 500 rose more than 1 percent to session highs on Wednesday, boosted by a surge in bank stocks following media reports on stress test results that suggested bank capital shortfalls might be less than previously expected.

The Dow and S&P 500 gained on Wednesday on economic optimism spurred by a jump in bank shares as investors bet that capital shortfalls will be manageable, plus reassuring labor market data and Walt Disney's better-than-expected profit.

Regulators have told Bank of America Corp it needs $34 billion of capital to withstand a deep economic downturn, as the U.S. government prepares to release results of industrywide stress tests.

Regulators have told Bank of America Corp it needs $34 billion of capital to withstand a deep economic downturn, an industry source familiar with results of a government stress test said late on Tuesday.

Wall Street was poised for a higher open on Wednesday as encouraging signs about the job market offset renewed concern about the health of banks after a source told Reuters stress tests show Bank of America has a $34 billion capital shortfall.

Stock index futures turned positive on Wednesday after better-than-expected data on private-sector employment.

Wall Street was set for a lower open on Wednesday on renewed concern about the health of banks after a source said government stress test results show Bank of America needs as much as $34 billion in capital.

Bank of America needs $34 billion in extra cash, a source familiar with U.S. government stress tests on leading banks told Reuters, unsettling markets and stoking talk of a possible asset sale in China.

Futures for the Dow Jones industrial average, the Nasdaq 100 and the S&P 500 share indexes were down 0.2-0.4 percent at 5:02 a.m. EDT, pointing to a lower start on Wall Street.

Futures for the Dow Jones industrial average, the Nasdaq 100 and the S&P 500 share indexes are down 0.2-0.4 percent at 5:02 a.m. EDT, pointing to a lower start on Wall Street.

Bank of America Corp has been deemed to need as much as $34 billion in additional capital, according to the results of a government stress test, a source familiar with the results told Reuters late on Tuesday.

Futures for the Dow Jones industrial average, the Nasdaq 100 and the S&P 500 share indexes are down 0.2-0.4 percent at 0902 GMT, pointing to a lower start on Wall Street.

World stocks steadied around the previous day's near four-month high on Wednesday while the yen jumped as concerns over the health of Bank of America offset the impact of strong results from BNP Paribas.

Stocks slipped and the yen rose on Wednesday after news Bank of America needs $34 billion in extra capital startled investors who had grown more comfortable with risk ahead of official results of stress tests on U.S. banks due on Thursday.

Citigroup Inc may have to raise $5-$10 billion in new capital to meet a U.S. government requirement that it holds up to $55 billion in capital, the New York Times said, citing people familiar with the matter.

Stocks slid and the yen rose on Wednesday after news Bank of America needs $34 billion in fresh capital, sending shivers through investors ahead of official results of stress tests on U.S. banks due for release on Thursday.

Federal Reserve Chairman Ben Bernanke, seeking to soothe markets worried about the eagerly awaited government stress tests of 19 big banks, on Tuesday downplayed the possibility of new taxpayer bailouts.

Federal Reserve Chairman Ben Bernanke testified at the Joint Economic Committee on Tuesday that he never asked Kenneth Lewis, chief executive officer of Bank of America Corp., to remain silent about the Merrill Lynch & Co. losses, before its January 1 acquisition.

About 10 of the 19 largest U.S. banks being stress tested will be instructed by regulators to raise more capital, according to a source familiar with official talks.

World stocks hit a fresh four-month high on Tuesday while government bonds steadied after signs of improvement in the U.S. housing sector and increasing optimism about banks triggered a rally on Wall Street.

U.S. regulators have deemed that about 10 of the 19 U.S. banks being stress tested will need to raise more capital, according to a source familiar with official talks.

Citigroup may put more employees on commission or offer them larger base salaries as it tries to retain key staffers without running afoul of laws limiting executive pay at banks that receive government funds.

Bank of America Corp , denying a media report, said it had no plans to raise $10 billion in common equity, while another report said Citigroup Inc was looking to raise capital from private investors.

Corrects 2nd para to show US regulators asked Wells Fargo to raise capital

U.S. stocks rallied on Monday, driving the S&P 500 into positive territory for the year as investors bet banks' capital shortfalls may be manageable and housing data fueled hopes the recession is easing.

The largest U.S. banks made the case to regulators on Monday that they have the financial firepower to withstand a deeper recession, as Bank of America denied a report it was trying to raise capital of $10 billion.

U.S. stocks rallied on Monday, driving the S&P 500 into positive territory for the year as investors bet banks' capital shortfalls may be manageable and housing data fueled hopes the recession is easing.

U.S. stocks rallied on Monday, driving the S&P 500 into positive territory for the year as investors bet banks' capital shortfalls may be manageable and housing data fueled hopes the recession is easing.

Warren Buffet is the largest shareholder in Wells Fargo. He claims it is a Fabulous Bank and would like to buy it all. Is he serious or is he just talking up his shares?