Bank of America Leads the Dow Higher

The Dow is up slightly on some mixed economic reports. As of 1:15 p.m. EST, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up 48 points, or 0.34%, to 14,019. The S&P 500 (SNPINDEX: ^GSPC  ) is up 0.28% to 1,521.

There were two U.S. economic releases today:

Report

Period

Result

Previous

NFIB Small Business Optimism Index

January

88.9

88

Job openings

December

3.6 million

3.8 million

Source: MarketWatch U.S. Economic Calendar.

This morning the National Federation of Independent Business said its Small Business Optimism Index improved by roughly one point to 88.9.

Among the 10 components measured, the lowest was the net percentage of owners who believe the economy will improve in the next six months. The net percentage rose 5 percentage points to -30% from -35%.

That's the fourth-lowest reading of expectations for improved business conditions in the survey's 38-year history. NFIB Chief economist Bill Dunkelberg said: "With the dismal news that our economy actually contracted in the fourth quarter of 2012, it isn't any wonder that more small firms expect their real sales volumes to fall, few have plans to invest in new inventory, and hardly any owners are expanding or hiring. Owner pessimism is certainly not surprising in light of higher taxes, rising health insurance costs, increasing regulations, and just plain uncertainty"

We will have more information on whether small-business owners' fears are warranted tomorrow when the Department of Commerce reports January retail sales. Economists don't have such low expectations as small-business owners, predicting no growth, whereas earlier economic reports have showed a slowing economy.

The second economic release was from the Department of Labor, which reported that job openings fell 2.6% from November's four-year high of 3.79 million to 3.62 million in December. Year over year, job openings were up 2%.

US Job Openings: Total Nonfarm Chart

US Job Openings: Total Nonfarm data by YCharts.

Today is markedly more positive than yesterday, with 25 of 30 Dow stocks up so far.

Today's Dow leader
Today's Dow leader is Bank of America (NYSE: BAC  ) , up 2.8% to meet its 52 week high of $12.20. Banks' financial results are highly dependent upon the health of the economy, so given today's mixed news, you wouldn't expect financial stocks to be up. In today's risk-on, risk-off world, however, it's no surprise that Bank of America is leading the market's rise.

Many investors are bullish on the stock, including star mutual-fund manager Bruce Berkowitz. Bank of America makes up 9% of his fund. With the stock trading below book value and the business improving, Berkowitz thinks he could end up quadrupling his money on Bank of America. Berkowitz believes Bank of America has done a great job of taking charges against bad assets and dealing with its numerous legal problems.

To find out more about the bank that Berkowitz is so bullish on, check out our in-depth company report on Bank of America. The report details Bank of America's prospects, including three reasons to buy and three reasons to sell. Just click here to get access.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2250693, ~/Articles/ArticleHandler.aspx, 10/24/2014 9:09:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement