Bank of America Is Reaping Its Rewards Today

By late morning, it looks like the market is having another pretty good week. The Dow Jones Industrial Average is picking up where it left off on Friday, and the S&P 500 (SNPINDEX: ^GSPC  ) has finally rubbed all the sand from its eyes and is moving up, as well.

But this week really belongs to the big banks as they bask in the warmth of their wins from the Fed stress test results late last week. Wells Fargo (NYSE: WFC  ) , JPMorgan Chase (NYSE: JPM  ) , Citigroup (NYSE: C  ) and Bank of America (NYSE: BAC  ) are all up today, but I think it's fair to say that the latter is the real star, as investors bid up its share value in heavy trading this morning, energized by the bank's excellent financial checkup results.

The hard work is paying off
Bank of America's CEO Brian Moynihan has worked tirelessly to whip the big guy into shape, and its recent stress test performance is indisputable proof that he has delivered the goods. The bank made a wonderful showing on the Fed's test, beating JPMorgan at every turn. Only Citigroup did a bit better, and that bank is feeling the love right now, too.

But headwinds remain. The mortgage problems are still lurking in the background, although great strides have been made in that arena, too. Then there is the question of earnings, which Moynihan has pledged to ratchet upwards. Hopefully, investors will see the fruits of that effort when the bank releases its first-quarter results next month.

Still, this promises to be an exciting week for B of A as we move inexorably toward Thursday, when the Comprehensive Capital Analysis and Review results reveal whether loyal investors will see some of that robust capital returned to them in the form of buybacks and chunkier dividends. B of A has been burned in that regard before, so investors will doubtless be sitting on pins and needles until then.

While there's nothing wrong with keeping your finger on the pulse of your favorite stock, as Foolish, long-term investors, 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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