bank stocks

As a new week begins on Wall Street, nobody wants bank stocks, J.P. Morgan Chase hints at changes at the top, OPEC ministers tussle over crude, and airlines are in for some financial turbulence. In fact, the only good news is for France, which apparently won't lose the IMF over the DSK scandal.

After a rough opening session on Monday, stocks rebounded sharply on Tuesday. The Dow enjoyed a triple-digit gain after oil prices eased and bank shares bounced higher on the possibility of further dividend payouts and share buybacks.

Fourth-quarter 2010 earnings season ramps up this week. Analysts expect strong results from some big corporate names. And on the heels of last week's big earnings beat from JPMorgan Chase, the financial sector will have plenty more results to peruse this week.

As big banks start reporting earnings, JPMorgan CEO Jamie Dimon is the latest exec to talk about dividends. Overall, Wall Street is expecting the big banks to post strong results, including improved credit quality and increased capital.

Two recent acquisitions by Canadian banks likely foretell that M&A activity among U.S. banks will only accelerate next year. Smaller banks that survived the financial crisis, but have few growth opportunities, are now attractive takeover targets.

U.S. credit card delinquencies fell in October to the lowest levels of the year as more people were able to restart payments on their consumer debt, The Wall Street Journal reported, citing company filings.

The crisis could hit bank earnings in several ways, not all of them directly related to the foreclosure problem. One big risk is "putbacks," the faulty loans banks could be forced to repurchase. JPMorgan puts that cost at up to $120 billion.

Two years after Lehman Brothers collapsed and put the financial crisis into meltdown mode, Wall Street and the financial industry are still struggling to rebuild from the ashes. But as the economy recovers, are bank stocks good buys? Here are the bull and bear cases for three of the nation's biggest banks.

Morgan Stanley's second-quarter earnings easily topped Wall Street's expectations as the investment bank swung to a profit from a year-ago loss on sharply higher revenue. Adjusted earnings were 80 cents per share, versus the 46-cent estimate.

Wells Fargo reported that its second-quarter earnings fell to $3.06 billion, or 55 cents a share, from $3.17 billion, or 57 cents a share, in the year-ago quarter. This was well above analyst expectations for earnings of 48 cents per share.