Could This Be the Reason Bank of America Is Tanking Today?

Bank of America (NYSE: BAC  ) finished off the trading week on Friday with its head above water, possibly because of the release of its annual report. Things look a bit different today, though, and I'm suspecting that it may have something to do with one particular nugget contained in that report that may have gotten stuck in investors' throats.

More bad news on the doorstep
The newsy morsel that B of A was being sued by the New York Attorney General's office for more shoddy mortgage products was quickly plucked from the 400-plus pages of the bank's 10-K form and bandied about gleefully in short order. After all, these types of lawsuits are a huge weight on B of A, and the width and depth of the problem is still unknown. It seems investors have chewed up and digested this news over the weekend, and they're not happy. Shortly before noon, the big bank is the volume leader in NYSE trading, and the outcome so far isn't stellar.

Bank of America's glum Monday is being shared by banking fellow JPMorgan Chase (NYSE: JPM  ) , which may be suffering from the fallout from a New York Times article published over the weekend, which highlighted how it badgers its wealth management brokers to push its own products, whether they fit the client's needs or not.

Wells Fargo (NYSE: WFC  ) and Citigroup (NYSE: C  ) are looking sparkly, however, despite the news that Citi had boosted its estimates for legal and regulatory reserves to $5 billion at the end of the fourth quarter, up $1 billion sequentially. Wells, on the other hand, may still be basking in the glow of Warren Buffett having recently bulked up on the bank's shares, which now constitutes the Oracle's No. 1 investment holding.

The day's not over, though, and the market may yet be a bit kinder to B of A, particularly as investors look forward to the Fed's stress test results, coming out in just a couple of days. Of course, as Foolish, long-term investors, we recognize the need to keep the one-day jumps and jives of a stock in perspective. Even stocks have good days and bad days, so it's important to realize that sometimes they're not portents of dire news, but merely squiggles that we can safely ignore. 

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Read/Post Comments (6) | Recommend This Article (5)

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  • Report this Comment On March 04, 2013, at 1:11 PM, nofoolingforme wrote:

    Tanked? Please define that word.

    It is down 1 percent on a day when the market has been down close to one-half percent. At one point today, it was up 1 percent.

  • Report this Comment On March 04, 2013, at 1:49 PM, Treelover66 wrote:

    Its the Fed Stress Test due out Thursday

  • Report this Comment On March 04, 2013, at 3:23 PM, PinkFloydRoadie wrote:

    nofoolingforme. Precisely my thought and you beat me to the punch with your comment.

    It sure seems like the media and some people like to use words like TANK, DIVE, PLUMMET, etc when a stock is down 1/2 %. These days, that is a normal movement for a stock.

    Try to use more precise terminology and not follow the media's desire to sensationalize everything.

    For what is worth, BAC is now up .2% so I guess we should say the stock is skyrocketing ;-)

  • Report this Comment On March 04, 2013, at 5:32 PM, superfrag wrote:

    It's Karma!

    Bank of America talked me into a particular program which prohibited me from re-financing at a later date.

    What was the program? I will gladly tell you.

    Put only 5% down (when I insisted I put 20%) no closing costs to me and 7% interest rate.

    Karma will and did come back and bite them in the butt!!

    Ha Ha Ha!

  • Report this Comment On March 04, 2013, at 10:40 PM, justamie33 wrote:

    Bank of America is the worst financial institution ever created....I am a single mom who has been applying for a home loan modification for 29 months now...YES! 29 months and I still have no answers.

    After all this time and over 145+ pages of documents faxed, wouldn't you think I could get an answer?

  • Report this Comment On March 05, 2013, at 7:37 AM, yllihP wrote:

    Does the Fed control Wall St. by an Executive Order? Seems strange with the jobless country, with a deficit as high as it is, and gas soaring, we have such a high dow and the other. Did Barry write another executive orde to keep it high?????

    Time we get rid of him with his Constabulary Army to take over the country. And, by the way, who is paying this Army - the U.S. taxpayers?

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