The market crazies aren't over yet, it seems. After finishing up rather nicely yesterday, big banks Wells Fargo (NYSE: WFC ) , Bank of America (NYSE: BAC ) , and Citigroup (NYSE: C ) are all dropping early this Friday morning, along with just about everything else, including the Dow and the S&P 500.
Why so glum?
While the overall market blahs are likely to blame for Wells Fargo's decline, it's still a bit disappointing. The bank was on an upward trajectory all week, ending each day higher despite the continued roiling in the markets. In addition, Wells and compatriot Bank of America had some good news yesterday, which I would have expected to buoy each banks' share price today.
Bloomberg reported late yesterday that Wells and B of A will not be facing another lawsuit from the New York Attorney General's Office regarding mortgage servicing concerns, after all. Last month, AG Eric Schneiderman announced his intent to sue over alleged breaches by the two banks in the terms of the $26 billion foreclosure settlement. Bank of America immediately told him that he had no right to do so, citing terms in the settlement stipulating that the banks should be given the right to cure any problems before enforcement action could be taken.
As it turns out, B of A was right. A committee that oversees the terms of the settlement noted that all banks that signed the agreement -- which include JPMorgan Chase (NYSE: JPM ) and Citi, though those two weren't named in the action planned by Schneiderman -- must be given a chance to fix problems according to the terms of the settlement. Good news, indeed, but it is not being reflected in Wells' share price this morning.
Still, it is early yet, and the market may cheer up before too long. Fewer lawsuits in the offing is always good news for big bank investors, who may reward Wells after the good news sinks in. For now, though, things are looking glum.
There is obviously still some volatility in the markets, which may not subside today. As Foolish investors well know, a snapshot look at any given stock, taken in isolation, can be detrimental to the long-term view. The big picture, as always, is what really matters, and the normal ups and downs of the market are something that investors with their eyes on the prize take into consideration, knowing that these hills and valleys don't mean much of anything on their own, and are just part and parcel of the business of intelligent, long-term investing.
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