Bank stress tests a huge success

Goldman Sachs upgraded Bank of America and MarketWatch reports that investors are galloping back into bank stocks, convinced that the government's recently concluded stress testing has identified all potential future problems. The banking system is healed!

Investors rushing back into financials, Oppenheimer says
Having avoided the sector, fund managers now try to catch up with rally

SAN FRANCISCO (MarketWatch) -- After avoiding financial-services shares like the plague over the past year, mutual-fund managers and other institutional investors are rushing back into the sector to avoid missing another rally, investment strategists at Oppenheimer & Co. said Monday.

First-quarter losses suffered by banks and other financial companies will likely represent the trough of the sector's current earnings cycle, they added in a note to clients.

They also said, "Themes have shifted so far in 2009, in our view, with portfolio risk now residing with being too underweight financials."

Underweight (or, better yet, no-weight) financials doesn't sound risky to me.