Why the Big Four Banks Are Big-Time Fence Sitting Today

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

With second-quarter earnings starting to fade into a distant but generally pleasant memory for bank investors, and with no big market news or developments breaking on either a national or global scale, Big Four bank stocks are lackadaisical and meandering this morning. There are a few stories of note worth relating, though.

More than a month after the start of what was to be the final courtroom showdown between Bank of America (NYSE: BAC  ) and American International Group (NYSE: AIG  ) over $8.5 billion in soured mortgage-backed securities, very little has happened. The trial was put on temporary hold due to scheduling conflicts on the part of presiding judge Barbara Kapnick, and has recently resumed.

Since then, AIG tried to get B of A to settle out of court -- at the suggestion of Kapnick herself -- but B of A refused. There's obviously more to come on this, but this shutdown of AIG's offer to settle out of court potentially signals confidence in the superbank's case that the original settlement should hold. Who knows, maybe Kapnick herself was trying to send AIG a message to take the money and run.

With tens of billions of dollars possibly at stake for B of A, this is some glimmer of hope that the already accounted for $8.5 billion is all the bank will be required to cough up in this leftover scuffle from the financial crisis.

JPMorgan Chase (NYSE: JPM  ) is reportedly near a settlement for charges that it manipulated energy markets in California and the Midwest. It's estimated that the payout will be $410 million. While an almost half a billion dollar fine for the nation's biggest bank can hardly be called a win, it is significant that the bank's commodities chief, Blythe Masters, probably won't be officially sanctioned as part of the agreement with the Federal Energy Regulatory Commission.  

Overall, after opening initially up, shares in B of A, JPMorgan, Citigroup (NYSE: C  ) , and Wells Fargo (NYSE: WFC  ) moved quickly lower. And three hours into trading, each seems to be having a hard time making up its mind whether to stay up, stay down, or just stay put: roughly paralleling the movements of the market's three major indices today. Call it the post-earnings, no-news blues. 

More from The Motley Fool
Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

Editor's note: A previous version of this article noted the trail between AIG and Bank of America had not yet resumed, when in fact it has.


Read/Post Comments (1) | Recommend This Article (2)

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 July 23, 2013, at 2:07 PM, siferdst wrote:

    On the contrary, the case that you mention resumed about 2 weeks ago, with a significant amount testimony taking place. The hearing is scheduled to go through the end of this month.

Add your comment.

Compare Brokers

Fool Disclosure

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: 2551984, ~/Articles/ArticleHandler.aspx, 9/27/2016 3:25:12 PM

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...

Today's Market

updated Moments ago Sponsored by:
DOW 18,226.25 131.42 0.73%
S&P 500 2,158.17 12.07 0.56%
NASD 5,304.02 46.52 0.88%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 3:09 PM
BAC $15.34 Up +0.25 +1.62%
Bank of America CAPS Rating: ****
JPM $66.33 Up +0.55 +0.84%
JPMorgan Chase CAPS Rating: ****
AIG $58.65 Up +0.40 +0.68%
American Internati… CAPS Rating: ****
C $46.45 Up +0.56 +1.22%
Citigroup CAPS Rating: ***