Shares in Wells Fargo, the fifth-largest US bank, leapt by more than 32 per cent yesterday after it reported better-than-expected second-quarter results and lifted its dividend, leading other financial stocks and broader equity markets higher.

The S&P 500 index gained 2.49 per cent by 4pm in New York, rebounding from its lowest level since 2005, as Wells Fargo helped ease concerns over the financial sector. Banks such as Washington Mutual, Bank of America, Lehman Brothers and many of the smaller regional banks followed the San Francisco-based bank higher.