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Oct. 10 (Bloomberg) -- Morgan Stanley and Citigroup Inc. led U.S. banks higher in New York trading after European leaders pledged to deliver a plan to stem the debt crisis that has led to concerns about global lenders’ balance sheets.
Morgan Stanley climbed $1.05, or 7.4 percent, to $15.29 at 4 p.m. in New York Stock Exchange composite trading, bringing its increase during the last week to 23 percent. Citigroup jumped 7.6 percent and Bank of America Corp. rose 6.4 percent, helping to lead the 81-company Standard & Poor’s 500 Financials Index to a 5.1 percent gain.
The S&P 500 has rebounded about 9 percent from a 13-month low on Oct. 3 amid optimism that European leaders will succeed in taming the debt crisis. German Chancellor Angela Merkel and French President Nicolas Sarkozy said yesterday they will deliver a plan to recapitalize European banks and address the Greek debt crisis by the Nov. 3 Group of 20 summit.
Every company in the S&P Financials Index climbed today. The index has declined 22 percent this year. Morgan Stanley, based in New York, is down 44 percent this year. Bank of America, based in Charlotte, North Carolina, has dropped 53 percent, while New York-based Citigroup lost 44 percent.
Merkel said European leaders will do “everything necessary” to ensure that banks have enough capital. Belgium also said today it will buy part of Dexia SA and provide security for depositors as part of a plan to rescue the lender.
U.S. Treasury Secretary Timothy F. Geithner said last week that U.S. financial firms have strengthened and there is “absolutely” no chance of another collapse like Lehman Brothers Holdings Inc. in 2008.
--With assistance from Stuart Wallace in London. Editors: William Ahearn, David Scheer
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