Bank of America (NYSE:BAC) opened on a high note today, with a 1.5% increase from yesterday's close of $11.53. But the jump was quickly reversed just an hour later, with a quick drop to just below yesterday's close followed by a slow rebound as the day goes on. These fluctuations were not reserved just for BAC, however, as other bank stocks and both the S&P 500 and Dow experienced very similar movements.
One potential culprit behind the stocks' roller-coaster ride this morning: disappointing housing data. Single-family home sales dropped 7.3% in December, even as the average median price rose. Since mortgage originations have been bulking up banks' revenues, this news didn't do them any favors.
Bank of America saw the biggest hit, falling 1.8% from its high for the day to its low. Citigroup (NYSE:C) also slid on the news. On the other end of the spectrum, JPMorgan Chase (NYSE:JPM) has been a pretty steady gainer through the day. Perhaps bolstered by its announcement of an increased dividend, mortgage giant Wells Fargo (NYSE:WFC) saw a limited downside to the housing news.
Investors can breathe a sigh of relief as the banks have all rebounded from their lows this morning. Likewise, both indices recovered, and as of 12:30 p.m., were up by 0.4% from yesterday's close. Both were bolstered by impressive earnings releases from Proctor & Gamble.
As most here at the Fool would tell you, basing any investment decision on one day's price movements would be foolish (note the lowercase "f"), but being educated on the factors that can move your stock's price will help to make you a better investor, capable of weathering the price fluctuations of any particular day.
Fool contributor Jessica Alling has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup Inc , JPMorgan Chase & Co., and Wells Fargo. 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.