Banks Lead Market Higher; Citi Jumps

Stocks continued to rise Wednesday, led by banks, amid a fresh vote of confidence for the sector.

The Dow was up about 30 points in late-morning trading, led by Bank of America and JPMorgan .

Citigroup shot up more than 4 percent as Rochdale Securities analyst Dick Bove gave the company a vote of confidence on CNBC this morning and as reports surfaced that the company's real estate unit might be purchased by Apollo Management. Citi is up 12 percent in the past five days as investors have cheered the company's progress.

Bove also gave a shot in the arm to the entire banking sector, saying two to three years from now, bank dividend payouts are going to be back up around 40 percent.

Also drumming up interest in banks is news that British bank Barclays is said to be considering buying a U.S. retail bank. Some of the names being bandied about include Fifth Third, PNC, SunTrust and Comerica.

Bank of America has announced that it will stop debit-card purchases from going through if customers don't have enough money in their account to comply with new regulations on overdraft fees set to take effect in July.

In economic news today: Wholesales inventories unexpectedly fell 0.2 percent in January as sales rose to their highest level since October 2008; economists had expected to see a 0.2-percent increase in inventories.

Earlier, a report showed mortgage applications roselast week — even as mortgage rates rose.

Economist Nouriel Roubini, who predicted the 2007 financial crisis, said in a research note that the risk of a double-dip recession has risen because of poor economic data in the U.S. and Europe's debt crisis.

Indeed, U.S. economists have trimmed their growth forecast for next year, although they raised expectations for economic growth this year, a survey released Wednesday showed.

Toyota and U.S. safety regulators sent inspectors to San Diego to investigate the case of a runaway Prius that accelerated out of control on a freeway in California and had to be brought to a halt by a police car.

More mergers and acquisition news: Abbott Laboratories is acquiring Facet Biotech for $27 a share, after a hostile offer of $17.50 from Biogen Idec failed. The cash deal will cost about $450 million.

Elsewhere, InterMune's experimental drug to treat lung scarring received backing from a Food and Drug Administration panel.

Apparel chain American Eagle Outfitters is due to report fiscal fourth-quarter results before the bell and analysts predicted it will make a profit of 33 cents a share on sales of $969 million.

Still to Come:

WEDNESDAY: Obama health-care speech; wholesale trade; state unemployment rates; Google hearing; weekly crude inventories; 10-year auction
THURSDAY: $2B California bond sale; international trade; weekly jobless claims; 30-year auction; earnings from Nat Semi, Aeropostale
FRIDAY: Gov'ts retail-sales report; consumer sentiment; business inventories; earnings from Ann Taylor

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