After an impressive run last week, Bank of America (NYSE:BAC) is ending this week down almost 2%. Though the first few days of trading were looking up for the bank, some troubling news and speculation killed B of A's chances of gaining more. Though forces outside the bank may be pressuring the share price lower, there is still good news for BAC investors to take with them on the holiday weekend.
When the man speaks, you listen
Fed Chairman Ben Bernanke provided the first taste of economic news for the week on Wednesday when he testified in front of the Joint Economic Committee in Congress. Basically repeating the same line we've heard since the latest FOMC meeting, the committee will adjust the current stimulus policy once there are concrete signs that the economy continues to improve. He specifically mentioned the labor market, which was the target of the bond buyback program's aide to the overall economy. More than just Bernanke's voice have spoken out saying the same thing, but also adding that the committee would adjust in either direction should an initial change cause the economy to slow or contract.
Banks were boosted right after the testimony made its way through the airwaves and headlines, but by the end of trading, most of the banks were down.
Bank of America generates approximately 4% of its revenue in the Asian markets, so the impact of Thursday's news that the Japanese markets had dropped suddenly hit the bank pretty hard. But investors soon realized that the bottom-line impact of a softening Asian market wouldn't hurt B of A greatly because of its diverse operations, and the stock price gained back most of its early losses.
Today the bank hovered around the break-even point, with a few trips here and there. Ending the day in positive territory was a move in the right direction for the bank, and likely due to the news that B of A is still eyeing up places where it can trim expenses and become leaner. Since 2010, when CEO Brian Moynihan took the top seat at the bank, BAC has shed more than 600 bank branches. Another 40 are on the chopping block, all in New York or Pennsylvania. With deposits totaling $1 billion, the branches could fetch a cool $20-$30 million for Bank of America, which would keep servicing the loan accounts.
Though this week was a disappointing one by itself, long-term investors should have no problems with the bank heading into the Memorial Day weekend. Not only is B of A keeping up with its priorities, but it's also providing some great returns in the process. It may have lost 1.96% this week, but it's up 7.31% in the last month, and 9.81% year to date.
Fool contributor Jessica Alling has no position in any stocks mentioned -- you can contact her here. The Motley Fool owns shares of Bank of America. 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.