Bank of America Blows Past $6 as Financials Surge
Bank of America (BAC) has recently displayed a strong reaction to headlines, especially having dipped below the $5 handle just over a week ago. Today saw a similar instance where the bank posted a 8.6% gain during market hours based on… nothing?? Now the far reaching rumor of The White House’s supposed trillion dollar bailout plan could certainly be considered a catalyst for such a strong upward move, but that would suggest that such a plan would be of benefit to the Bank. When an institution’s source of income is from the premium they receive on the money they lend, how is stifling that cash flow considered a positive action?
By Avi Salzman
On a very mixed day for the broader market, big banks have suddenly begun to pop, led by Bank of America (BAC).
It was a little less than a month ago that the megabank’s stock dipped under $5 per share, but today it has climbed safely back over $6, and was recently up 7.3% at $6.23. One reason could be that Citigroup analysts held fast to their Buy recommendation on the stock today. In general, analysts have grown slightly more bullish on the sector with the turning of the calendar. Most famously, Barclays analyst Jason Goldberg warned investors this week that it’s riskier now to not own banks than to own them.
The sector’s rise is surprising in part because European banks are trading lower on pessimism about the debt situation in the Euro Zone and their increasing reliance on the European Central bank. Indeed, not all big banks are faring well today. Citigroup (C) is up 2.1% but Goldman Sachs (GS) is off by 0.3%.
via Bank of America Blows Past $6 as Financials Surge – Stocks To Watch Today – Barrons.com.