Wells Fargo leads financial markets up

After Wells Fargo & Co. surprised Wall Street with better-than-expected results and Barclays PLC sold its popular iShares exchange trade fund business for $4.4 billion, financial stocks surged leading a broad market rally.

Wells Fargo unveiled its first-quarter results that reflected record profits as its shares jump 34% at the opening. So the bank expects $3 billion profits, or 55 cents a share. These figures are well ahead of FactSet Research assessments of 31 cents a share. Thereby Wells Fargo shares closed up 32% at $19.61. The news also helped lift shares of other major banks. Thus, Bank of America Corp. closed up 35% at $9.55 with J.P. Morgan Chase & Co. and Citigroup Inc. rising more than 12%. On Thursday The New York Times cited the regulators saying all 19 banks undergoing the government's so-called stress tests will pass them. 

The Financial Select Sector SPDR exchange trade fund, which tracks the financial stocks in the Standard & Poor's 500 Index, finished up 16%. Shares of Barclays jumped 16% to close at $10.90 after the U.K. bank said it agreed to sell its iShares exchange traded fund unit to private equity group CVC Capital Partners for $4.4 billion. Shares of Morgan Stanley rose 11% to close at $25.35. As the Wall Street Journal reported, the investment bank may report a first-quarter loss due to a rebound in the price of some of its bonds, it estimated the bank may take a hit of $1.2 billion to $1.7 billion due to rebounding prices in the first quarter.

Lincoln National Corp., which was up 32.8% Wednesday, jumped 14% to close at $10.40. Hartford Financial Services Group and Prudential Financial jumped 13% and 16% respectively.