Stock Market Today: Bank of America’s Legal Woes and Ulta Salon’s Bounce

Why Bank of America and Ulta Salon's stocks are on the move today.

Jun 11, 2014 at 9:25AM

Can stocks make it five-for-five? The Dow Jones Industrial Average (DJINDICES:^DJI) posted its fourth-straight record high yesterday and has a shot at extending that run in this session. However, the index lost 60 points in pre-market trading, suggesting a solidly lower start to the stock market today. Wall Street could find early direction from global stocks, which fell overnight. Europe's Stoxx index, for example, was down 0.8% as of 8:30 a.m. EDT.

Meanwhile, news is breaking this morning on Bank of America (NYSE:BAC) and Ulta Salon (NASDAQ:ULTA) stocks, which could both see heavy trading in today's session.


Bank of America shares were down 1.4% in pre-market trading on news reports that its high-stakes legal negotiations with the Justice Department have stalled. The New York Times cited inside sources who said the government is looking for more than $17 billion in settlement penalties tied to prior mortgage loan abuses, but that the bank is offering substantially less. Investors have to brace for two painful prospects as these negotiations wind down: that BofA will ultimately accept a fine above the record $13 billion that JPMorgan Chase paid last year, or that a sprawling civil lawsuit will be filed against the company. 

Ulta Salon shareholders are in for a good day. The stock was up 12.3% in pre-market trading after the beauty retailer last night posted a 22% jump in fiscal first-quarter sales and a 19% profit improvement. Revenue climbed to $714 million while earnings clocked in at $0.77 a share (compared to last year's $0.65 haul). Powering those great results was a 20% boost in the store base as Ulta opened 21 new locations. Existing stores saw spiking traffic levels as well: comparable-store sales rose an impressive 9%. There wasn't much for investors to complain about in these quarterly results, although gross profit margin did tick lower by half of a percentage point to 34.5% of sales. Ulta reaffirmed its full-year outlook for comps growth of roughly 5% and total revenue growth in the "mid-teens percentage range." The company expects second-quarter sales to be about $710 million, or 18% above the prior-year period.

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Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Ulta Salon, Cosmetics & Fragrance. The Motley Fool owns shares of Bank of America and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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