Magazine article American Banker

Price Data, Profit Reports Keep Bank Stocks Rising

Magazine article American Banker

Price Data, Profit Reports Keep Bank Stocks Rising

Article excerpt

Benign economic data and strong earnings boosted bank stocks Friday. American Banker's index of 50 largest banks rose 1.96%, and its index of 225 banks rose 2.31%. Lifting the group was news that U.S. producer prices, excluding food and energy, declined more than expected in June for the first time in five months, according to government data. The core rate of the producer price index fell 0.1% last month, after rising 0.2% in May. The overall producer prices for finished goods rose an expected 0.6%, after showing no change in May. "Inflation does not seem to be a problem," said Scott J. Brown, chief economist at Raymond James & Associates, St. Petersburg, Fla., "but energy costs continue to go up, and that is nothing to sneeze at." Bank stocks smoothly handled the Commerce Department report that U.S. retail sales rose more than expected in June. Total sales rose 0.5% in June, after a revised increase of 0.3% in May. Excluding automobile, sales rose 0.2% in June, after a revised increase of 0.5% in May. "This suggests that the economy is slowing but not as quickly as people anticipated," Mr. Brown said. Quarterly retail sales growth is fairly mild, but on a year-to-year basis it is "pretty strong," he said. A good showing in earnings on Thursday and Friday also helped the rally in bank stocks, analysts said. The day's biggest gainers included J.P. Morgan & Co., which rose $4.5625, or 3.68% to $128.6875; PNC Financial Services Group, up $2, or 4.08% to $51; and Fifth Third Bancorp, up $2.3125, or 3.44% to $69.625. All three companies reported solid earnings on Thursday and Friday, with J. …

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