Investors seem to be fooling around with Bank of America this April morning, as the bank experiences some downward movement in share price amid lots of trading activity.
To be fair, B of A may be a top mover today, but volume is relatively light so far, and the market seems a bit sloggy. Both the Dow and the S&P 500 are falling so far today, and fellow big banks Wells Fargo and Citigroup are also experiencing some malaise. Only JPMorgan Chase is looking perky, up by nearly 0.50%.
Good news, bad news
Big banks have had a mix of news over the past few days, at least some of which may be influencing investors today. Wells might be feeling some of its investors' annoyance with the news of some nepotism in its ranks as it comes to light that one of the bank's board members has a son on Wells' payroll.
Citi could be slumping because of a slap on the wrist from the Federal Reserve, which last week cited the megabank for lax money laundering controls. As for JPMorgan, its recent upgrading from Standard & Poor's as the bank puts the London Whale fiasco behind it seems to be working its magic.
As for Bank of America, the bad news may be winning out over the good. While B of A and fellows Citi and JPMorgan must have been dancing a figurative jig over the dismissal of a passel of lawsuits regarding LIBOR rigging, the second biggest bank also had a couple of pieces of bad news as well, both of them pertaining to that irritating mortgage problem that the bank just can't seem to shake.
For one thing, B of A's Merrill Lynch division was hit with a $309 million mortgage-related lawsuit over the weekend, harking back to 2007 when Merrill securitized nearly 6,000 mortgages that later began to smolder. In other crummy mortgage news, B of A was unmasked as the home-loan servicer that has generated the greatest number of all customer complaints tallied by the Consumer Financial Protection Bureau. Fully 30% of the gripes were leveled at Bank of America, even though the bank serves only 15% of all mortgage loans.
For investors in a bank that is looking to grow revenue by jumping back into the mortgage market -- in addition to trying mightily to put these past mortgage tribulations behind it -- these developments may very well have put B of A's stock in the doghouse today.
The day is young, however, and Bank of America could rally once again. As Foolish, long-term investors, we recognize that one-day changes in share price don't make or break an investment. Even stocks have good days and bad days, so it's important to realize that sometimes they're not portents of dire news, but merely squiggles that we can safely ignore.
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