After all the brouhaha late last week regarding the breakthrough 14,000 number for the Dow (DJINDICES:^DJI), shrinkage is occurring with the dawn of a new week. The S&P 500 (SNPINDEX:^GSPC) is off as well, so it's not really surprising that Bank of America (NYSE:BAC) is also slipping, along with fellow financials JPMorgan Chase and Wells Fargo.
In the early afternoon, B of A was down a little less than Wells, which had slid quite a bit farther than JPMorgan. This may sound strange, but I think this may be good news for Bank of America, considering the troubles it was dealing with over the weekend.
The news that B of A was virtually incommunicado on Friday hogged headlines all weekend, as the big bank suffered another round of online, mobile, and even telephone issues. With cyber security a hot button these days, you might think that customers would be happy that it was only Bank of America's own bungling, and not terrorists, that caused the outage. The bank's customers were not relieved by this news, however, and griped loudly and often. Seeing a drop in the big guy's stock today wouldn't have surprised me, given these circumstances.
Another issue coming to light this past weekend was the fact that B of A may have engaged in less-than-ethical behavior regarding mortgage loans after it acquired Countrywide. Court filings last Friday suggest that B of A willfully shortchanged investors by not buying back loans that it had modified. This threatens to throw the whole $8.5 billion settlement reached with investors in 2011 into question, and open yet another door into the abyss that has become the Bank of America-Countrywide debacle.
And yet, B of A isn't sinking like a stone, which I think means one of two things: the strides the bank has made recently have pumped up investors' faith so much that they're not worried, or this new development regarding murky mortgages hasn't sunk in yet. Stay tuned -- it should be an interesting week.
Of course, let's be clear: Trying to pin rhyme or reason on a stock's one-day move is a fool's (lowercase "f") errand. Wise investors may occasionally note the day-to-day movements, but they know that it's the long-term, big picture that's key to making prudent investment decisions.