Two-and-a-half hours into trading, even a down-market day couldn't stop Bank of America (NYSE:BAC) investors from smiling: The superbank's shares are up 6.2% for the week on strong second-quarter earnings as well as a few reassuring words from the Federal Reserve.

From Wall Street to Washington
On Wednesday, B of A reported that net income rose 63% year over year for the second quarter, from $2.5 billion to $4.0 billion. In addition, total revenue increased 3.2% year over year, from $22.0 billion to $22.7 billion. Earnings per share for were $0.32, handily beating analyst expectations of $0.25.

Moving from Wall Street to Capitol Hill, on Wednesday and Thursday Fed Chairman Ben Bernanke made what will likely be his last appearance testifying before Congress on the country's monetary policy.

At the top of most investors minds was the fate of quantitative easing. And while Bernanke didn't back off his plan to start tapering QE later this year, he did stress that the Fed remained committed to accommodative monetary policy as long as the economy was still struggling.

Foolish bottom line
And Bernanke went out of his way to stress that the economy is still struggling: that unemployment remains too high and inflation too low. With no surprises coming out of his two days of testimony, the markets responded positively, though those warm feelings weren't long-lasting enough to carry through to today -- a sign of how fragile investor confidence in general is right now.

But happy second-quarter news from the country's second-biggest bank were more than enough to give B of A investors a big week. It's hard to argue with 63% net income growth, though with revenue growth of just 3.2%, investors should be asking how much of that income growth is sustainable. Some of it came as a result of lower expenses, i.e., cost-cutting. But you can only cut so much fat before you start cutting into muscle.

And some of that income growth came from the bank's Wall Street business lines, which can be fickle --  much more fickle than consumer-based business lines, and B of A is still a consumer bank at heart. On that note, deposits were up a healthy 4% year over year and mortgage production was up 40% year over year (though that ship may soon be sailing for all the banks).

It's not clear that B of A is out of the woods yet when it comes to leftover pain from the financial crisis. Investors are still awaiting the results of the suspended June trial pitting the superbank against AIG and other big financial institutions. But B of A's overall encouraging Q2 results made for a well-deserved big week for shareholders. 

Fool contributor John Grgurich owns no shares in any companies mentioned. Follow John's dispatches from the not-so-muddy trenches of high finance and big banking on Twitter @TMFGrgurich.

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