Why Bank of America Stock Could Break $14 Today

Bank of America (NYSE: BAC  ) reports earnings on Wednesday, and from the way its stock price is behaving, I would say investors are expecting the news to be spectacular.

At mid-morning, shares have risen admirably, building on the momentum the bank's stock price experienced last Friday. It is possible, too, that B of A is getting a lift from the sparkly second-quarter report released earlier this morning by Citigroup (NYSE: C  ) , which beat analysts' estimates on both earnings and revenue. Citi is enjoying a well-earned boost, with an increase of over 1% already today.

Financials are doing quite well today, in fact. Most big banks are up, except for JPMorgan Chase (NYSE: JPM  ) , down inexplicably on the heels of a sweet second-quarter report last Friday.

Bad news won't spoil this rally
Dour news on the legal front hasn't had a negative effect on either bank today, even though both have been tagged in another lawsuit -- this time over price fixing in the credit-default swap market. Dilution probably helps, as numerous other banks are being sued by a group of Danish pension funds, as well -- including JPMorgan, Goldman Sachs, (NYSE: GS  ) and Morgan Stanley (NYSE: MS  ) .

In other news, Senators Elizabeth Warren and John McCain have collaborated on a piece of bank-control legislation based on the now-defunct Glass-Steagall Act. The bill, which is aimed at separating the retail and trading units of the nation's largest banks, isn't likely to sail through Congress anytime soon, but it still serves as a reminder that opponents of the TBTF banks haven't given up.

Anticipation is driving activity for B of A
Though the stock has stumbled slightly over the past hour, the overall trend is upward so far. Though it is early, I think investors are feeling good about Bank of America's prospects and will drive the price to new highs later in the day. Trading is heavy, and the anticipation of a good earnings report will likely keep activity robust. If the current momentum holds, Bank of America could set a new 52-week high before the closing bell. 

If you're looking for some long-term investing ideas, you're invited to check out The Motley Fool's brand-new special report, "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so simply click here now and get your copy today.


Read/Post Comments (0) | Recommend This Article (3)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2538186, ~/Articles/ArticleHandler.aspx, 11/27/2014 4:50:37 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement