Bank of America Gets Bludgeoned Again Today

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Poor Bank of America (NYSE: BAC  ) . After seeing its share price rise spectacularly in the week prior to its first-quarter earnings report, the stock took a real drubbing immediately after that report was issued. Today, it is getting beat up anew, and I think it is still feeling the consternation of investors about its less-than-sparkly earnings announcement.

Was the report really that bad? Sure, there were weak points, such as mortgage banking malaise, as well as continuing legal hassles in regards to its Countrywide smudge pot of stinky legacy loans. But there were bright spots, too: The streamlining process is working, and B of A has reduced nonperforming assets by $5 billion year over year. Plus, its Bank of America Merrill Lynch division is kicking butt, bringing home the bacon to the tune of $3.68 billion -- a 7% boost from the year-ago quarter's $3.44 billion.

So, why is the share price still falling by mid-morning, having lost 0.68% since the opening bell? Softness in the financial sector as a whole is surely at work here, as the Dow (DJINDICES: ^DJI  ) has been somewhat grumpy itself this Monday morning and now sits 0.12% lower than it did at the open of business today.

Other big banks are feeling unloved, as well. JPMorgan Chase (NYSE: JPM  ) and Wells Fargo (NYSE: WFC  ) are also down so far, as is Citigroup (NYSE: C  ) . With their dire predictions about the declining mortgage-writing market, I'm not terribly surprised that the first two banks' stocks are saggy right now. Citi, however, is also down -- by a whopping 0.84% as I write this -- after sailing to a $46.66 close on the day after its excellent earnings announcement, where it beat analysts' estimates right down the line.

One new issue that could adversely affect the biggest of the banks reared its head last week, and might be having a dampening effect on those stocks today. The Brown-Vitter bill threatens to force banks to hold even higher reserves than they do now, never something that banks or their investors like to hear. But that's a future, though looming, threat, and one that may never materialize; meantime, Bank of America and its fellows continue to take a pounding.

By late morning, Bank of America has begun to perk up a little, so perhaps not all is lost. As the big banks face what could be a discouraging day, however, keep in mind that it is the overall performance of a stock that really counts. As Foolish, long-term investors, we recognize the fact that one-day changes in share price don't make or break an investment. 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. 

Despite this morning's lack of enthusiasm for the big guy, there's no escaping the fact that Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

Read/Post Comments (5) | Recommend This Article (9)

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.

  • Report this Comment On April 22, 2013, at 2:47 PM, Demokrat wrote:

    What exactly is bludgeoned? How was BAC bludgeoned today? It only dropped 7 cents below its Friday close!! Or were you simply sensationalizing for lack of anything better to write. You must not feel very efficient seeing as how it is in the green at the writing of this comment.

    You missed your shot at writing this article last week when its pps dropped 10%. Your bludgeoning comment is too little too late. Write about something more useful.

    Public sentiment: "Sensationalist, trigger happy lady wishes she could have retracted the article after seeing BAC drop no further than 7 cents from its Friday close and eventually go on to see it in the green for the day. Not exactly the wisest of writers."

  • Report this Comment On April 22, 2013, at 3:29 PM, VegasSmitty wrote:

    I bought a truckload of this stock below 5, I'll keep it despite what the idiot who wrote this article says.

  • Report this Comment On April 22, 2013, at 4:09 PM, megalo99 wrote:

    Umm...they're all up right now? That's more like a welcomed flogging than a bludgeoning.

    JPM $47.40 +0.17 +0.36%

    WFC $36.75 +0.06 +0.16%

    C $45.16 +0.13 +0.29%

    BAC $11.72 +0.06 +0.51%

  • Report this Comment On April 22, 2013, at 4:31 PM, unclesam32 wrote:

    As the United States of America, I must not have given enough money to keep these 'banks' from failing. I will give more, but I hope you don't own stock, because YOU will be the loser. Just ask the old GM stockholders. But it is NOW the American thing to do!

  • Report this Comment On April 22, 2013, at 5:46 PM, jcan1701 wrote:

    These banks all suck. The problem is that they have very poor customer service, are extremely greedy (I got charged $5 in KC, MO just to see if I had money. And the first time, it didn't even show me the amount like I requested, and I still got charged!), very bad and expensive ATM machines, and they nickle and dime every transaction from both personal accounts and business accounts. These big banks deserve to fall. Please pray the Government does not create another stimulus. The US needs more smaller businesses and people with more ingenuity. Sometimes, the only way to get that is to make people suffer so that they get off their own b...ts.

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