Five of twelve districts reported signs of improvement, according to the central bank’s Beige Book, while encouraging signals were seen in manufacturing. Consumer sales remaineded weak, which was due to softness still lingering in labor markets.

The Dow Jones industrial average had advanced 34 points and the Nasdaq lead the session, advancing 19 points. Commodity prices were rising as OPEC members were gathering for their latest meeting. A weaker dollar helped fuel the advance, as the Euro rose to $1.451, from $1.4499 late Tuesday.

There was a slide in treasury prices after a $20 billion dollar auction of 10-year notes drew decent demand, and its yield inched up to 3.50%.

Several major banks that underwent the government stress tests of their ability to withstand a severe economic downturn have asked to repay TARP as soon as possible. The government has not yet announced who and when, and does not expect to until around the second week of June. Recommendations will likely come in batches rather than one bank at a time, the official said. 

But regulators worry that banks trying to get out of TARP are overestimating their prospects and could be forced to return for more money if the economy falls off a cliff. Experts believe the government will allow TARP recipients to repay funds only over time, perhaps 12 months, rather than all at once. Goldman Sachs Group Inc, JPMorgan Chase & Co, and Morgan Stanley have applied to repay TARP funds. 

Earlier this month, regulators told nine of the 19 big stress-tested banks that they did not need more capital. The government created TARP last fall to unlock the flow of credit after credit markets were brought to a near halt by shocks such as Lehman Brothers Holdings bankruptcy. At first, banks viewed TARP money as a positive, signaling government confidence. But TARP also allows the government to unilaterally impose restrictions, including on pay back, and many investors now believe holding bailout money signals weakness. 

Many banks have met major requirements to repay funds, including sales of debt not backed by the government. However, regulators have not made clear what other factors they are considering, such as how much can be repaid at once and on what terms, or what they will charge banks to buy back warrants giving the government a right to buy stock over time. Policymakers are causing confusion among large banks about what the Treasury Department must see before deeming a bank safe outside TARP, said a financial industry source familiar with the talks about repayment.  The Treasury Department is also concerned that if it lets some banks repay TARP but not others, investors will punish those banks deemed to be falling behind. 

Several analysts said many members of Congress are tired of throwing taxpayer money at the banking system. Lawmakers are eager for repayments but do not want the funds to go back into TARP, where the money could be available for future rescues.