financial stocks

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.

The pint-size Manhattan bank's market cap of $2 billion is dwarfed by JPMorgan's $161.5 billion and BofA's $126.4 billion. Still, Signature has done far better for investors this year. By steering clear of risky derivatives and sticking with basic banking, Signature is thriving.

Stocks closed broadly higher Tuesday, helped by more deal activity in the financial sector and upbeat earnings from the tech sector. After more than two years, the market has regained all its losses following the implosion of Lehman Brothers in September 2008.

Though the job market remains challenging, for one group, the labor market was at its steadiest of the year last month. The number of chief executives departing their jobs fell to 79 in November, the lowest monthly number of 2010, according to job-services firm Challenger, Gray & Christmas.

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 world's biggest brokerage posted a third-quarter net loss, hurt by special charges and declines in sales and trading activity in a low-volume market. On an adjusted basis, Morgan missed Wall Street's forecast.

Goldman Sachs reported sharp declines in third-quarter earnings and revenue, hurt by slower summer trading activity. But its profits still easily exceeded analysts' average forecast.

The U.S. stock market has been on a tear since Sept. 1, but technical caution flags are now appearing in the charts. A close look at action in the VIX, S&P 500, Nasdaq 100 and financials reveal that the tide may be about to start going out.

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.