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All 31 U.S. banks pass stress test

3:58am IST - 02:08

All the U.S. banks passed a key health check by the Fed, but face yet another one next week. U.S. stocks close slightly higher. Bobbi Rebell reports.

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A sigh of relief for the banking sector. All 31 U.S. banks passed the Fed annual health check, known as stress tests, as the industry continues to rebuild after the financial crisis. There will be a second stage of stress tests next week. If they pass that one, banks will get the green light for increases in shareholder pay-outs like dividends. Investors were reluctant to make big moves ahead of Friday's employment report., stocks failing to gain much traction in either direction. The number of Americans filing new jobless claims rose to its highest level since May. But that didn't bother S&P Capital IQ's chief U.S. economist Beth Ann Bovino SOUNDBITE: BETH ANN BOVINO, U.S. CHIEF ECONOMIST, S&P CAPITAL IQ (ENGLISH) SAYING: "It's still rather low. We're look at around 300,000 for the four-week moving average, well below where it was just a year ago. We're pretty optimistic in terms of the overall economic outlook and for jobs." Other data showed new orders for factory goods in January unexpectedly fell for a sixth month. Another big drug deal. AbbVie is buying the biotech cancer drug maker Pharmacyclics for about $21 billion. The move lessens AbbVie's reliance on its blockbuster arthritis drug, Humira. McDonald's stock valuation has gotten too fat in the eyes of Piper Jaffray, so the brokerage downgraded the sharers to neutral from overweight. Costco profits surging almost 30 percent- coming in better than forecasts-thanks in part to a tax benefit. Gap reporting same store sales fell 4 percent last month- but on the bright side- the drops at each of the company's brands- Gap, Banana Republic, and Old Navy were smaller than a year ago. Kroger's profit forecast for this year beat analysts' targets. The supermarket operator's quarterly profit shot up 23 percent, blasting past estimates. Nearly a dozen analysts raised their price targets on American Eagle Outfitters' shares after the teen apparel retailer posted strong earnings. In Europe, strong corporate results drove stocks higher. It's Europe's best earnings season since mid-2011.

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All 31 U.S. banks pass stress test

3:58am IST - 02:08