Stocks Rally after Fed, J.P. Morgan

Stocks rallied on Tuesday as financials leap across the board, pushing major averages to multi-year highs, after J.P. Morgan Chase & Co. hiked its dividend and the Federal Reserve held rates at record lows. The Dow Jones Industrial Average rose 217.97 points, or 1.68%, to 13,177.68. The S&P 500 Index climbed 24.86 points, or 1.81%, to 1,395.95. The Nasdaq Composite rose 56.22 points, or 1.88%, to 3,039.88.

The Federal Reserve on Tuesday kept interest rates at record lows and continued a program to swap assets it owns into riskier securities, as the central bank downplayed the strength of recent economic data.

JPMorgan Chase & Co became the first bank on Tuesday to say regulators have completed stress tests of its balance sheet and approved a dividend increase and stock buybacks. The bank said it will raise its quarterly dividend by a nickel to 30 cents and buy back as much as $12 billion of stock this year.

U.S. Bancorp (NYSE:USB) said Tuesday it hiked its dividend by 56% and will buy back up to 100 million shares after passing the Federal Reserve’s stress test.

Wells Fargo & Co. (NYSE:WFC) said late Tuesday it raised its quarterly dividend 83% to 22 cents a share from 12 cents a share after it passed the Federal Reserve’s stress test.

Ally Financial Inc., Citigroup Inc. and SunTrust were estimated not to have maintained sufficient capital ratios under a hypothetical deep recession scenario the Federal Reserve created to evaluate whether banks have reserves necessary to withstand another crisis like the credit crunch of 2008. 

Crude-oil inventories rose 2.8 million barrels in the week ended March 9, the American Petroleum Institute said late Tuesday.  The trade group also reported gasoline stockpiles down 2.1 million barrels, while supplies of distillates declined 3.5 million barrels.

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