What a difference a day makes. Just yesterday, Bank of America (BAC 1.53%) suffered a double whammy: A downgrade by analysts at Credit Suisse (CS), then a renewed promise by a prominent U.S. Attorney to carry on with the toxic-mortgage fight against B of A subsidiary Countrywide Financial. The bad news took its toll, and by market close, the big guy's stock had lost almost 5%.

But, as a famous character once said, "Tomorrow's another day," and things are definitely looking up today. Is this just dumb luck, or have investors digested the bad news and come back to show their faith in the big old bank?

Overreaction, or reasonable doubt?
The Credit Suisse analyst, Moshe Orenbuch, made some valid points, to be sure. Earlier this week , the bank's stock traded at more than 12 times its 2013 estimated earnings, compared to 9.6 for Wells Fargo (WFC 2.73%), 8.6 for JPMorgan Chase (JPM 0.65%), and 9.1 for Citigroup (C 0.26%), the analyst's current favorite.

As for B of A's ability to make money, Orenbuch isn't way off base by noting that it is at a disadvantage to its peers as far as earnings are concerned . Countrywide dinged the bank's confidence in the mortgage lending business, and mortgage-writing powerhouse Wells Fargo has taken up much of the slack. JPMorgan has begun to do the same. B of A's CEO Brian Moynihan knows this, and he has vowed to work harder on the lending part of things -- starting last quarter.

And then, there are the legacy loans -- lurking in the background, causing problems on a fairly consistent basis. Although the two recent mortgage fraud settlements take a big weight off of B of A's figurative shoulders, trouble is still brewing in that regard. Preet Bharara, U.S. District Attorney for southern New York, announced yesterday that, in spite of those agreements, his office will not falter in its mission to prosecute the bank for every last fraudulent deal perpetuated on Fannie Mae and other government sponsored entities by Countrywide. That's a big unknown, and it could cause problems farther down the road than just the next few months.

One Fool's take
The Bank of America-Countrywide story is old hat to the bank's hardy investors, and I think yesterday's news has, in their eyes, become just that. One analyst's downgrade does not a trend make, and though Orenbuch made his decision based on facts, they weren't really new facts. B of A is working through the very issues he presents, and investors are fully aware of that -- and proving it. Take that, Mr. Orenbuch.