Bank of America Stock Is Defying the Dow's Drop

 Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Bank of America (NYSE: BAC  ) stock is making headway today, while the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , of which the financial giant is a member, is down on no real news. As of 1:25 p.m. EDT the Dow is down 91 points, or 0.59%, to 15,360, while the S&P 500 (SNPINDEX: ^GSPC  ) is down 0.35% to 1,688.

There was one U.S. economic release today.

Report

Period

Result

Previous

Producer Price Index

July

0%

0.8%

Core PPI

July

0.1%

0.2%

The producer price index, a measure of inflation among manufacturers, was unchanged from June to July. Core PPI, which excludes food and energy prices, was up 0.1%. The numbers were below respective analyst expectations of 0.3% and 0.2%.

US Producer Price Index Chart

US Producer Price Index data by YCharts.

Over the past 12 months, the PPI has risen 2.1%, while the core PPI is up only 1.2%. Tomorrow we get more inflation data with the release of the Consumer Price Index, as well as data on industrial production and the housing market. In the absence of big news, the Dow continues its recent downtrend, led downward by Home Depot and Johnson & Johnson, which have both lost more than 2%.

Today's Dow leader
Today's Dow leader is Bank of America, up 1.2% after Morgan Stanley financials analysts released their list of top investment ideas. Financials have been doing increasingly well while the rest of the market's earnings growth is slowing. Banks especially have a tailwind behind them, as long-term rates have risen recently after the Fed suggested they could begin tapering as soon as the end of the year.

US 30 Year Mortgage Rate Chart

US 30 Year Mortgage Rate data by YCharts.

Banks get money in the form of deposits and loan it out at higher rates in the form of mortgages and other loans. The low rates of the past year have been a blessing and a curse as banks have benefited from people refinancing their mortgages to take advantage of the low rates, but they've been a curse in that the banks were not making much from loans. It remains to be seen how much banks and housing-market activity will be hurt by the rise in rates. 

If you want to learn how to take advantage of the impending bank renaissance, click below to discover the one company leading the way. You see, this fast-growing company is poised to disrupt big banking's centuries-old practices. And it stands to make early investors like you a fortune -- if you act now. Our brand-new investor alert "Big Banking's Little $20.8 Trillion Secret" lays bare every banker's darkest secret for the world to see. Simply click here for instant access!


Read/Post Comments (0) | 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.

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: 2595246, ~/Articles/ArticleHandler.aspx, 12/17/2014 4:31:19 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...


Advertisement