Bank of America (NYSE:BAC) reports earnings on Wednesday, and from the way its stock price is behaving, I would say investors are expecting the news to be spectacular.
At mid-morning, shares have risen admirably, building on the momentum the bank's stock price experienced last Friday. It is possible, too, that B of A is getting a lift from the sparkly second-quarter report released earlier this morning by Citigroup (NYSE:C), which beat analysts' estimates on both earnings and revenue. Citi is enjoying a well-earned boost, with an increase of over 1% already today.
Bad news won't spoil this rally
Dour news on the legal front hasn't had a negative effect on either bank today, even though both have been tagged in another lawsuit -- this time over price fixing in the credit-default swap market. Dilution probably helps, as numerous other banks are being sued by a group of Danish pension funds, as well -- including JPMorgan, Goldman Sachs,(NYSE:GS) and Morgan Stanley(NYSE:MS).
In other news, Senators Elizabeth Warren and John McCain have collaborated on a piece of bank-control legislation based on the now-defunct Glass-Steagall Act. The bill, which is aimed at separating the retail and trading units of the nation's largest banks, isn't likely to sail through Congress anytime soon, but it still serves as a reminder that opponents of the TBTF banks haven't given up.
Anticipation is driving activity for B of A
Though the stock has stumbled slightly over the past hour, the overall trend is upward so far. Though it is early, I think investors are feeling good about Bank of America's prospects and will drive the price to new highs later in the day. Trading is heavy, and the anticipation of a good earnings report will likely keep activity robust. If the current momentum holds, Bank of America could set a new 52-week high before the closing bell.
Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Goldman Sachs. The Motley Fool owns shares of Bank of America, Citigroup, 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.
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