NEW YORK (Reuters) – U.S. bank stocks, which had their best week on record last week, powered higher again on Monday amid optimism that banks are succeeding in efforts to restore profitability, and that a change to accounting rules might alleviate feared capital shortfalls. In afternoon trading, the KBW Bank Index .BKX of large U.S. lenders was up 6.8 percent, after rising 37.4 percent last week in what Barclays Capital analyst Jason Goldberg called the biggest gain in the index's history. Among individual lenders, Bank of America shares were up 18.1 percent in afternoon trading to $6.80, JPMorgan 5.5 percent to $25.05, Citigroup 42.1 percent to $2.53, and Wells Fargo & Co (WFC.N) 7.3 percent to $14.96. There is a general picture emerging that at least from an operating standpoint, banks are enjoying a better period than they have had for a couple of years," said Marshall Front, chairman of Front Barnett Associates LLC in Chicago.
MELTDOWN FEAR EASES
Bank stocks also rose after finance chiefs from the Group of 20 nations over the weekend pledged to boost efforts to help economies, and Federal Reserve Chairman Ben Bernanke said the U.S. economy will probably emerge from recession this year. "There's a lack of pessimism," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Maybe investors are taking that meltdown scenario off the table."