The market's three major indexes were all up slightly on Thursday, with the Nasdaq leading the way:
Dow Jones Industrial Average
There were a bunch of interesting developments in the market:
- The four largest banks in America -- Bank of America
(NYSE: BAC), Citigroup (NYSE: C), JPMorgan Chase, and Wells Fargo -- along with Ally Financial finally settled with federal and state authorities. For $25 billion, the banks put to rest allegations of improper foreclosure practices with at least 49 states (Oklahoma may agree to a separate settlement). Of that, $20 billion will be used for principal reduction and underwater refinancings. The remaining $5 billion will be paid to borrowers, the state governments, and the federal government.
- Greece appears to have agreed to its austerity measures, a prerequisite for a bailout.
- The House passed the STOCK Act, moving it closer to becoming a law (and abolishing insider trading by Congress).
Although the much-anticipated banking settlement relieves some uncertainty, the big banks didn't move much. And Bank of America was the only one of the Big Four to move up today (up 0.6%). Of course, B of A's gotten the most press for poor practices given its acquisition of Countrywide, so it's got the most to gain with closure. In addition to the $11.8 billion it has to contribute to the $25 billion settlement, it now also owes $1 billion to settle alleged false claims on FHA loans. The latter agreement is with the US Attorney for the Eastern District of New York.
Focus on the Dow
Looking at Dow stocks in particular, the biggest winner was United Technologies, up 2.5% amid speculation that it could sell its compressor and pumps units.
The biggest loser was Cisco, despite beating estimates when it reported earnings last night. A pair of analyst downgrades spoiled the party.
As you put the daily news in perspective and hunt for long-term buys, consider reading a free report I wrote called "The Stocks Only the Smartest Investors Are Buying." It details a bank much smaller than Bank of America that has some of the best operational numbers I've ever seen. To read the report and find out its name, just click here.
Anand Chokkavelu owns shares of Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Cisco. He also owns warrants in JPMorgan Chase, Wells Fargo, and Citigroup, and long-dated options in Bank of America.
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