Bank stocks gained Tuesday on optimism that the U.S. government’s plan to take equity stakes in financial players will help prospects for the entire banking system.
The market is betting that the Treasury Department’s move could thaw credit markets, spur investments in smaller banks and, at minimum, provide a psychological boost.
On a day when the Dow Jones industrial average closed down 0.8 percent, the SNL Bank & Thrift index rose 7.5 percent.
Bank of New York Mellon Corp., one of the initial group of nine key financial institutions participating, saw its stock gain 13 percent Tuesday after it disclosed that the Treasury will invest $3 billion in preferred stock and warrants.
Click here to read the full article …
