Extending the prior trading session's gains, the Dow Jones Industrial Average (DJINDICES:^DJI) is up in the first few hours of trading this morning. Following the downward spiral the market took at the end of last week, investors are looking for news that can help them regain some losses. So far, investors are feeling more optimistic this morning as the Dow sits at a 82-point gain as of 11:30 a.m. EDT.
This morning's news
Much to the dismay of economists, the Commerce Department revised the first quarter's GDP numbers, showing economic growth of 1.8% instead of 2.4%. While this is not great news for a recovering economy, it may be helping assuage some investor fears about the Fed's timeline for cutting back its stimulus policy.
While the market may finally be coming to terms with the fact that the Fed will base its cuts on data -- and that the current projections from the Fed are more optimistic than what we've seen so far -- being able to see an end to the "easy money" environment is still a hard pill to swallow. So when previously reported economic data is revised downward, possibly pushing out the Fed's timeline, the market can relax a little bit.
Banks follow suit
While the Dow makes steady improvement this morning, its bank stock components are mixed. Bank of America (NYSE:BAC) is up 0.45%, while JPMorgan (NYSE:JPM) is just below breakeven. While both banks were hit last week by the Fed announcement and then Monday's Chinese liquidity scare, JPMorgan is the lone loser this morning. Even Citigroup (NYSE:C), which has the biggest exposure to the Asian markets of the big four banks, is back in positive territory this morning.
Some of the drag may be coming from investors' concerns that the housing market's steady recovery could stall or plateau in the coming months. Both JPMorgan and Wells Fargo (NYSE:WFC) commanded the largest share of new mortgage origination in 2012, so a slowdown in new activity might slow their revenue growth.
Bank of America has been seeking a bigger seat at the table for mortgages, but with recent allegations of stonewalling qualified foreclosure customers for loan modifications, the bank may find fewer new buyers willing to walk through its doors. But with previous customer service improvement plans highly publicized, don't be surprised if there's a new one coming for mortgage customers.
The market may take a little bit of time to recover from the Fed-induced sell-off, but for the long-term investor it's important to keep an eye on the fundamentals of your investments. If you've been following the B of A recovery story, the latest mortgage-related saga may keep it low for a while.
Fool contributor Jessica Alling has no position in any stocks mentioned -- you can contact her here. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.