Bank earnings this week. Heres a look at the closing numbers for the major averages. The dow closed back above the key 17,000 mark. The nasdaq was up 26 and the s p added nine points. Details on the better than forecast earnings from citigroup. With the bank putting those soured investmentsehind it, investors dove in on citi. Kayla has more on what it means moving forward. Reporter the Bank Earnings may be low, but citigroup cleared it in the second quarter, with a heavy profit beat and rise in revenues too. Trading activity that improved slightly in june. Johnny gersbachs drop of only 15 as it happened looked relatively better. Even with the drop, the bank can operate well. I think we spend an awful lot of time focused on whats going on in markets. So i think there are some legitimate questions goingforward as far as markets, the rest of the business, id say we feel pretty good about the revenue prospects. Loans and deposits previously stashed away for bad credit. A rosie picture was clouded by a 7 billion settlement with the justice department. A 3. 8 billion charge to citys bottom line, wiping away 181 million of the banks profit. Brian rogers, chairman of t. Rowe price reached concerns about the costs of these settlements last week 37. Thats the shareholders money, i think the good news is, most of that is coming to an end. The citigroup situation may be one of the last. After that, the bank is going to look forward and not worry about their business. For citigroup, its a major legal milestone behind it. Some investors like david katz say the banks trade cheaply, but isnt a buy yet. Citigroups book value was down 50 over that time frame. They seem to have its act together. But its not as well run as some of these others. An Ongoing Investigation into fraud at one of its latin american units and a failing grade into the stress test. Mike corbett says hes confident the bank can reverse. Were still operating and feel strongly this isnt an issue with our business model, strategy, levels of capitol, clearly able to generate. We feel theres more work to do between now and your end. A long to do list remaining. For nightly business report, im kayla touche. Here to talk more about citi and the week ahead is fred cannon. Director of research and chief equity strategist. Nice to have you with us. Let me start by saying it seems so strange that city can deliver good news for the Banking Sector on the same day that it settles a huge settlement with the justice department. Does city finally have its act together . Good news in a relative sense. Remember a couple things that were mentioned. The settlement had already been signaled. The 7 billion was much bigger than would have been expected a month ago. And wiped out the quarters earnings. Secondly, the expectations for the quarter have been quite diminished going, in and they got over a low hurdle, thats a good thing. City has a lot to prove, though, as was mentioned, litigation issues arent over yet, this is a big hurdle of the mortgage issues. We have the fx issue, the lybor issue. The idea that some settlement is getting litigation behind these big banks is optimistic. Lets spin forward to a couple other banks. Jpmorg jpmorgan, it is tougher today, season the it, or you tell me for these big banks to make money. Investment banking revenue despite all the mergers isnt really blockbuster these days. What do you expect from those two. Coming up at city, coming into the quarter, expectations really came down hard this year over year down 20 to 25 , trading activity. Citi seemed to see things pick up in june, that can help them get over a hurdle. What you said is very important. Making a good return on investment is very difficult. You still have these litigation issues. We like to think on wall street theyre one off, at the end of the day, they do add up over time. And theres trading activity low. These big banks are getting to be in a position where they seem very cheap, and maybe were getting to an earnings level for these guys. Everyones worried about higher Interest Rates, the word on the street is, this is good for the Banking Sector. Are these buys . I knowou have for jpmorgan a buy on it, is it time to pick up as many of these stocks as you can . As you go into the back half of the year, have you to think, the fed is going to stick to their word, who knows if theyre going to raise rates, theyre going to stick to their word theyre going to raise them. Theres going to be a lot of people thinking about fed exit and financials are a good place to be, because its the one area where higher Interest Rates is a good thing. Thats not a good thing for most of the other parts of the economy, there are good things there. That said, truth is, as the fed mentioned last week, we dont have a good idea of what this is going to look like. Its a brave new world because of the 4. 5 trillion bank balance. I assume you heard brian rogers a moment ago talk about how he thinks this is getting the worst of the litigation risks behind sit cy. In terms of all of the banks, where are we in the process . Are we in the seventh inning, eighth inning, where . It looks like on the mortgage issue, were in the 7th or 8th inning. I think if we can get the doj settlements behind it, much better than expected, fha behind us, we have gotten over the mortgage issue, theres still a lot out there. Fx is just being underscored here. What about these issues on fraud in mexico, the whole Asset Management liability issues and the Payment Systems and the issues that have been raised. Remember this whole issue of bnp in these criminal charges, in the u. S. , its you know, lets face it the french and germans are going to look pretty hard at the u. S. Bank operations over there. Fred, thank you so much for coming on the program, always a pleasure to have you. In addition to citys news, some companies played lets make a deal today. That also lifted investors moods and spirits. Acquisitions are running nearly 70 above a year ago. For a total of almost 2 trillion in deals so far. And today brought a few more. First up, the generic drug maker myelan is buying outside the u. S. Its an all stock deal valued at more than 5 million. Myelan is expected to move to the netherlands. The corporate inversion aimed at lowering its tax rates. Shares of both companies finished higher. Also, Whiting Petroleum announced plans to buy kodiak oil and gas along with 2. 2 billion in debt. Creating the Biggest Energy producer in the 3 4 formations. Both companies strongly higher on the news there. Another big takeover today, this one involves rival engineering and Construction Companies opinion. Acon is buying San Francisco based timetable. San francisco president John Williams told the wall street journal after making more progress toward unemployment goals, the central bank could begin raising its benchmark rates earlier than previously expected. Rates may not be the only things rising soon. The biggest names in aviation were in england today. For the annual International Air show. Where Strong Demand for jets is very evident. Executives from boeing were on hand in the u. K. And on wall street, investors sent shares of boeing 1 higher. Phil lebeau has our report. For those who think demand for new airplanes cant go much higher. The International Air show flies in the face of conventional wisdom, airbus is launching a new twin isle plane. It starts flying in late 2017 and is already requested by airlines seeking greater fuel efficiency. So far, we have studied how to reduce it, so it will be more efficient regarding s bu cost, maturity, reliability. So we have a market of better aircraft. Reporter with the backlog stretching beyond 2020, shows airlines remain hungry for new airplanes with lower costs. Below historical averages right now, there have been some right now, there have been some other this is bbc world news. Funding of this presentation is made possible by the freeman foundation, newmans own foundation, giving all profits to charity and pursuing the common good for over 30 years, kovler foundation, Charles Schwab and union bank. For 150 years, we have at union bank our relationship managers work hard to understand the industry you operate in, working to provide capital for key strategic decisions. We offer expertise and tailored solutions and tailored solutions range ofge industries. What can we do for you . And now, bbc world news