Bank stocks rose modestly Thursday as some investors said the tone of President Barack Obama's State of the Union address was positive for banks.
The gains came even as the overall markets fell, after reports on employment, orders for big-ticket goods, and a disappointing forecast from communications equipment maker Qualcomm Inc. left investors concerned that the economic recovery is on shaky ground.
Last week, market watchers became skittish after Obama proposed limiting banks' size and risky trading behavior. Talk of the plan led the market to its worst three-day stretch since stocks bottomed last March.
"In general, the State of the Union was a bit of positive for the banks," said Fred Cannon, chief equity strategist at Keefe, Bruyette & Woods Inc. "Obama shook (Treasury Secretary Timothy) Geithner's hand and he didn't spend a lot of his time focused either bashing the banks or overly promoting his plans."
While Obama avoided talking about the banking overhaul plan in his speech Wednesday night, uncertainty over details of how that plan might eventually be enacted and how strong trading restrictions could be remains.
"At the end of the day, hopefully the economy is more important than Congress," Cannon said.
By early afternoon, the KBW Bank Index, which tracks 24 of the nation's largest banks, was up 1.2 percent.
Meanwhile, shares of Bank of America Corp. rose 22 cents to $15.42; JPMorgan Chase & Co. gained 50 cents to $39.83; and Wells Fargo & Co. was up 53 cents to $28.73. Citigroup Inc. gained 6 cents to $3.26.
Fourth-quarter earnings season continues for the banking industry. National banks have reported but many regional banks are still releasing their results.
Keefe, Bruyette & Woods analyst Melissa Roberts said so far "it looks like a mixed bag."
In KBW's look at 68 banks, on an operating-per-share basis, 43 percent, or 29 banks, beat Wall Street estimates; 46 percent, or 31 banks, missed estimates; and 12 percent, or 8 banks, met consensus estimates.
That is an improvement from the third quarter of 2009 and the 2008 fourth quarter when 52 percent and 73 percent of the banks missed consensus estimates, respectively, she said.
On Thursday, Iberiabank Corp., a rapidly expanding regional bank company, posted a huge gain in fourth-quarter profit as it took over the assets of two failed banks in Florida, the company said.
For the final three months of the year, the Lafayette, La.-based bank earned $106.2 million, or $5.23 per share, compared with year-ago earnings in the fourth quarter of $7.7 million, or 57 cents per share.
The news helped boost Iberiabank's shares, which rose 98 cents to $56.30.
Other regional banks saw their shares rise:
Regions Financial Corp., up 30 cents, or 4.9 percent, to $6.47. BB&T Corp., up 41 cents to $28.69.
Zions Bancorp., up 57 cents, or 3 percent, to $19.51.