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New York - The stock market bounced back Friday, a day after suffering its second-worst loss this year. Bank stocks had some of the biggest gains even though many of them had their credit ratings cut the day before.
JPMorgan Chase, Bank of America and other big lenders posted solid gains. Banking analysts said the downgrades from Moody's Investor Service late Thursday had been expected for months and removed uncertainty that had been weighing on banks.
"It's been like a cloud over the sector," said Brian Gendreau, market strategist with the broker Cetera Financial. "And look at who's going up: bank stocks. There are obviously some people who thought it would be much worse."
The Dow Jones industrial average gained 67.21 to close at 12,640.78. Bank of America gained 1.5 percent, or 12 cents, to $7.94, one of the best showings of the 30 stocks in the Dow.
In a note to clients, analysts at the investment bank Keefe Bruyette & Woods called Morgan Stanley "the clear winner." Some analysts had expected Moody's to lower Morgan Stanley's rating by three notches, instead of the two-notch cut it received.
Bank stocks rose across the board. Morgan Stanley rose 18 cents to $14.14. JPMorgan Chase climbed 48 cents to $35.99.