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Dow Jones industrial average edges higher in early trading on Wall Street; Citi slumps
Stocks opened higher Wednesday on Wall Street, a day after the market had its best day of the year. Citigroup fell after failing to convince regulators it was healthy enough to survive a severe downturn in the economy.
The Dow Jones industrial average was up 35 points at 13,212 in the first half-hour of trading. The Standard & Poor's 500 index was up 3 points at 1,398 and the Nasdaq composite was up 9 at 3,049.
The Dow is on its way to a sixth day of gains, its longest winning streak since February 2011. The Dow is now up 8 percent for the year. Other indexes are up even more: The S&P is up 11.2 percent, the Nasdaq 17 percent.
A powerful rally in bank stocks pushed the Dow up to its highest close since late 2007 Tuesday. The Federal Reserve said 15 of the 19 major banks it surveyed passed a stress test to see how they would stand up if the economy worsened. Citigroup was among the four that didn't pass.
Citigroup fell 3 percent in early trading. Other banks that passed the Fed's test mostly rose. Regions Financial rose 6.6 percent after the bank said it would sell $900 million in stock to repay some of the money it received as part of the 2008 bank bailout. Bank of America rose 2.6 percent and Zions Bancorporation rose 7.3 percent, the most of any stock in the S&P 500 index.
MetLife, an insurance company, also failed to pass the Fed's stress test. The stock slid 5 percent in early trading, the most in the S&P 500.
Gold fell $44 to $1,650.
The Fed was planning to wait until Thursday to release the results of its stress tests, which determine which financial companies are healthy enough to raise their dividends. After JPMorgan Chase surprised the market with an announcement Tuesday that it would raise its dividend and buy back stock, the Fed released the results early.
The yield on the 10-year Treasury note rose sharply, to 2.22 percent from 2.11 percent late Wednesday. The benchmark yield has risen for five days straight and is at the highest level since October. That's a sign that investors believe the economy is improving and that they're more willing to hold higher-risk assets like stocks and commodities.