More news has flushed the financial sector as it appears that banks may get the go-ahead to give back borrowed money, enabling them to leave the bailout program. The federal government has prohibited financial institutions from paying back borrowed TARP money unless they can prove that their are healthy enough to raise money in the capital markets on their own. Over the recent months, many banks have demonstrated their ability to raise capital and the Federal Reserve has announced that next week they will release an initial list of banks that will be able to reimburse the government, reports Eric Dash of the New York Times.
Despite this news, the Financial Select SPDR (XLF) was down nearly 2% in morning trading.
The Dow Jones Industrial Average was up nearly 0.3%, sending it in the black for 2009, the S&P 500 jumped nearly 0.2% and the Nasdaq was up about 0.4% in morning trading.
Kevin Grewal contributed to this article.