Stocks make afternoon surge

NEW YORK — Stocks shook off morning losses on Monday and surged in the afternoon to send the Standard & Poor’s 500 index to its best day in a week. It’s the latest turn for a market suddenly prone to quick shifts not only day to day but also hour to hour, as investors question whether President Donald Trump will really risk a trade war.

The S&P 500 lost as much as 0.6 percent shortly after trading began, only to finish the day 1.1 percent higher after rising 29.69 points to 2,720.94. It’s reminiscent of what happened Friday, when stocks reversed course on speculation that Trump was only making an opening bid when he promised to impose stiff tariffs on imported steel and aluminum, rather than a final offer.

The Dow Jones industrial average jumped 336.70, or 1.4 percent, to 24,874.76, and the Nasdaq composite gained 72.84, or 1 percent, to 7,330.70. Both came back from early-morning losses.

Bill would boost bank bailouts

WASHINGTON — A bipartisan bill that’s on the Senate floor this week would increase the odds of government funding going to bail out failed banks, according to a new report from the Congressional Budget Office.

The bill, which is scheduled for an initial Senate vote Tuesday and is expected to pass the chamber as soon as this week, would roll back some of the regulations Congress put in place after the 2008 financial crisis. A major feature of the bill is exempting about two dozen financial companies with assets between $50 billion and $250 billion from the highest levels of regulatory scrutiny from the Federal Reserve. If passed, it would be the most substantial weakening of the regulations put in place by the 2010 Dodd-Frank law that strengthened financial regulations.

The CBO report says those exemptions make it more likely a bank would collapse and lead federal officials to stabilize it with public funds. The CBO notes that this scenario is unlikely in any given year, but it says the bill makes it more probable.

“CBO’s estimate of the bill’s budgetary effect is subject to considerable uncertainty, in part because it depends on the probability in any year that a systematically important financial institution will fail,” the report says. “CBO estimates that the probability is small under current law and would be slightly greater under the legislation.”

The truly biggest banks — Goldman Sachs, JP Morgan, CitiGroup — have balance sheets well beyond $250 billion, and will not benefit from that change. But other well-known banks would be freed of some supervision, including firms such as SunTrust Banks and Fifth Third Bancorp that received government bailouts to survive the financial crisis.

— From wire reports