B. of A., Citigroup rise on Fed meeting
SAN FRANCISCO (MarketWatch) -- U.S. financial stocks closed higher Tuesday, led by strong bank gains, as investors were optimistic about Federal Reserve officials discussing ways to stimulate the economy.
A better-than-expected Spanish debt auction and a jump in U.S. building permits reinforced bullish sentiment.
Shares of J.P. Morgan Chase & Co. (JPM) traded up 2.2% as Chief Executive Jamie Dimon returned to Capitol Hill to answer questions before a House committee about the bank's recent $2 billion-plus derivatives trading loss. Read more on Jamie Dimon's testimony.
The sector helped lead the broader market higher in anticipation of more stimulus measures as the Federal Open Market Committee kicked off its two-day meeting on monetary policy and the U.S.economy. Read more on Federal Reserve.
In Spain, a debt auction saw the sale of 3.039 billion euros ($3.844 billion) of short-term bills, exceeding a target range of €2 billion to €3 billion, although at sharply higher yields. Read more on Spanish bond auction.
Also Tuesday, the Commerce Department said building permits rose to a four-year high even though starts on new homes declined in May. Read more on housing data.
Notable financial stocks with gains of about 3% or more included
Profit for the three months ended May 31 fell 11% after accounting for rising loan-loss provisions. Total loans rose 8.6% from the prior year to $57.06 billion, while Discover's credit-card loans grew 3.7% to $46.61 billion.
Provision for loan losses was $232 million, up from $176 million a year ago and $152 million in the prior quarter.