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For months, the rule on Wall Street has been to buy any dip you're fortunate enough to get. That strategy has worked again this morning as positive earnings reports and a modest rebound in Europe helped allay yesterday's fears that a plunge back into economic crisis was imminent. The prospect of merger and acquisition activity is looking up after Dell (UNKNOWN: DELL.DL ) succeeded in making a going-private deal that will pay shareholders $13.65 per share in cash. This move, too, has helped push the market higher, and by 11 a.m. EST the Dow Jones Industrials (DJINDICES: ^DJI ) managed to climb 120 points back up to 14,000.
Leading the Dow higher is Bank of America (NYSE: BAC ) , which climbed more than 2.9% in early trading. Optimism about the stock has climbed as money manager Bruce Berkowitz has been noted the bank's potential for huge returns in the coming years. With B of A trading well below book value and prospects for the industry improving, Berkowitz thinks he could end up quadrupling his money on Bank of America if conditions in banking return to their historical norms.
Speaking of B of A, Zynga (NASDAQ: ZNGA ) rose more than 4% after getting a somewhat surprising analyst upgrade from the bank's Merrill Lynch unit. The social-gaming company doesn't report until after the close today, but the analyst thinks stabilizing mobile trends, the potential for higher-than-expected bookings, and the relative performance of other social stocks justify the upgrade.
Finally, SandRidge Energy (NYSE: SD ) fell another 3.8%, building on substantial losses over the previous two trading days. The company's spun-off Mississippian royalty trusts have posted disappointing results, calling into question SandRidge's overall strategy. With guidance on those trusts raising concerns about future growth and production, SandRidge needs to re-establish that its reliance on the Mississippian Lime will pan out, rather than leaving investors exposed to high risks.
Can B of A keep soaring?
Bank of America's returns have been phenomenal lately, but is Bank of America's stock still worth buying? Find out in our premium research report, which details the bank's future prospects and challenges, including three reasons to buy and three reasons to sell. Click here right now to get access.