Brace for the Most Expensive, Manic Minutes of the Trading Year

Reuters

Banks rally after stress test, Bank of America underperforms

Shares in the biggest U.S. banks rallied on Friday after they passed the Federal Reserve’s annual health check, but Bank of America underperformed with test results implying it needs a larger-than-expected capital buffer, which could limit share buybacks and dividends. While the broader equity market also rallied on Friday, Wells Fargo & Co, up 7.5%, was the biggest gainer among the 34 lenders that underwent the Fed’s so-called stress test, which measures how they would fare in a hypothetical severe economic downturn. The group would have roughly twice the capital required under Fed rules in the downturn scenario, it said.