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Financial Stocks Roundup: FDIC Slams Banks With Mortgage Lawsuit


Bank stocks are rallying despite lawsuits and the possibility of hearings on Capitol Hill.

MINYANVILLE ORIGINAL Financial stocks made gains today and JPMorgan Chase (JPM) rallied 6% while House Democrats called for a hearing to investigate its massive trading loss.

The Financial Select Sector SPDR ETF (XLF) gained 0.50% while the S&P 500 (SPY) declined by 0.46%.

Representatives Elijah Cummings and Peter Welch wrote to Darrell Issa, the Republican chairman of the Oversight and Government Reform Committee, saying that JPMorgan's losses "exemplify the risks that continue to threaten the stability of our financial system and highlight the critical importance of the Dodd-Frank legislation."

The Securities and Exchange Commission and Commodities Futures Trading Commission are also investigating the bank's trading losses.

Nasdaq (NDAQ) shares are still drawing the ire of investors for the company's botching of the high-profile Facebook (FB) IPO. Shares of Nasdaq are down 2.30%.

Bank of America (BAC) is up nearly 4% despite being the focus of three lawsuits from the Federal Deposit Insurance Corporation. The FDIC is suing Ally Financial, Credit Suisse (CS), Citigroup (C), and JPMorgan Chase, among other major banks on behalf of smaller banks that failed after buying mortgage-backed securities that the banks allegedly misrepresented the risk of. The plaintiffs are seeking $92 million in total.

Twitter: @vincent_trivett
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