Bank stress test results help raise investor confidence

— -- Results of bank stress tests will finally be released Thursday, but they've already boosted confidence in financial markets, a key goal of the Obama administration as it tries to revive the banking system.

"The numbers look huge, but this process is about resolving uncertainty and reassuring that banks can survive the worst-case scenario," says Maureen O'Hara, finance professor at Cornell University's Johnson Graduate School of Management.

BofA shares soared 17% to $12.69; Citi, 17% to $3.86; and Wells, 16% to $26.84.

"Stress tests have been a market confidence builder to date," says Terry Moore, managing director of Accenture's North America banking practice.

The optimism could be fleeting if the market perceives the tests weren't strenuous enough, says Douglas Elliott, a fellow at the Brookings Institution. Much of the bullishness so far stems from hopes it might not be hard for the banks to raise capital. One way to do that is by converting the government's preferred share investments from the bank bailout program into common shares. That would boost the "tangible common equity" ratio, an important gauge against which losses are measured.