ADVFN - Advanced Financial Network.
HOME» NYSE » B » BAC Stock Price » BAC Stock News

Bank of America Share News

 Bank of America Corp. Stock Price
BAC Stock Price
 Bank of America Corp. Stock Chart
BAC Stock Chart
 Bank of America Corp. Stock News
BAC Stock News
 Bank of America Corp. Company Information
BAC Company Information
 Bank of America Corp. Stock Trades
BAC Stock Trades

JP Morgan Selloff Seen Spurring Flow Of Funds From Banks

--Investors put their money elsewhere rather than buying shares in another bank --Lack of investor interest in shifting funds from J.P. Morgan to Wells Fargo and U.S. Bancorp is in part because bank stock investors own those stocks already By Matthias Rieker Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Investors have drained almost $26 billion in market capitalization from J.P. Morgan Chase & Co. (JPM) since the bank announced a surprise $2 billion trading loss a week ago--and most of it likely has left the bank sector altogether. E. Keith Wirtz, the president and chief investment officer of Fifth Third Asset Management, said the money leaving banks is "is either going away from stocks, or they are going into categories like staples, utilities, health care, those more defensive sectors." Utilities and health-care stocks are roughly flat over the last five trading days, and consumer discretionary fell considerably less than financials. Biotechnology stocks are up. Bank stocks have struggled to find a firm footing after the financial meltdown. But the sector has been among the best performing this year. J.P. Morgan was part of the rally, in part because it was among the first to restore its dividend, with an increase last year and another one earlier this year. Its "premature" dividend hike "added fuel to the fire" of financial stocks, wrote Andrew Wilkinson, the chief economic strategist of Miller Tabak & Co. LLC, in a research note Thursday. "Financials outperformed discretionary stocks by 7% during the rally. All that has been given back as the rally turned to dust." J.P. Morgan, along with Wells Fargo & Co. (WFC) and U.S. Bancorp (USB), has long been the go-to stock for fund managers who want to invest comfortably in bank stocks. All three had come through the financial crisis in strong shape, their risk management held, their top executives are well regarded, and their growth prospects are promising. But shares of Wells Fargo and U.S. Bancorp, though not down nearly as much, seemed to absorb little of the money that left with the more than 15% decline of J.P. Morgan's stock. Shares closed at $33.93 Thursday, off 4.31% or $1.53. Shares are down $6.81 in five days. Investors put their money elsewhere rather than buying shares in another bank, no matter how stable the bank appears. The lack of investor interest in shifting funds from J.P. Morgan to Wells Fargo and U.S. Bancorp is in part because most bank stock investors own those stocks already. "They own all three. J.P. Morgan, Wells Fargo, U.S. Bancorp, those are the three big pillars" of the banking industry, said Byron Brand Snider, president pf West Oak Capital LLC, a J.P. Morgan shareholder. And "when you take a step beyond those names, then you have worries about balance sheets that aren't as big and strong. "If I were to lose confidence in owning a name like J.P. Morgan, it probably would be money flowing out of the sector," he said. He has held on to his J.P. Morgan shares. But other investors, particularly generalist fund managers selling J.P. Morgan "are pulling their money out" of the banking sector, said Brian Bertonazzi, the head of sales and trading at Sandler O'Neill + Partners LP. Thomas Michaud, the chief executive of KBW Inc., an investment bank specializing on the financial services industry, said, "Investors see what happens...and move on." J.P. Morgan's reputation took a massive hit when the bank disclosed that it lost about $2 billion already this quarter on trades to hedge the bank's credit risk. The full extent of the damage from the flawed hedging strategy won't be known until the trades are unwound, which could take until the end of the year, Chief Executive James Dimon told investors last week. Michaud said J.P. Morgan's issues shouldn't tarnish the entire industry, but they do in part because J.P. Morgan is such a big part of major bank indexes and the big drop is pulling down the sector's perceived performance, regardless of how risky the individual banks are. That adds to concerns that banks in general are too leveraged and, given the slow economic recovery and uncertainty about how regulatory changes will impact banks' profitability, overall not a good investment. Still, some analysts and investors believe sellers of J.P. Morgan stock are overreacting. Jill Cuniff, the president of Edge Asset Management, said her firm underweights banks, particularly the large banks. "We don't own Citigroup (C), we don't own Bank of America (BAC), we are not confident in their business models," she said. Wells Fargo and J.P. Morgan, however, were exceptions, and "we still feel confident" in J.P. Morgan. For Wirtz, the J.P. Morgan dip is "presenting a buying opportunity. "My worry is that J.P. Morgan overreacts and overcompensate on risk control," he said. "They need to take risk; I want them to earn money." -By Matthias Rieker, Dow Jones Newswires; 212-416-2471; matthias.rieker@dowjones.com

Stock News for Bank of America (BAC)
DateTimeHeadline
09/03/201401:31:51J.P. Morgan in Talks to Sell Oil-Supply Agreement
08/28/201414:25:10J.P. Morgan Working With Law Enforcement on Cyber Attack -- 3rd...
08/28/201414:17:23J.P. Morgan Working With Law Enforcement on Cyber Attack -- 2nd...
08/21/201419:36:44BofA Settlement Earmarks $7 Billion for Homeowners
08/21/201415:16:08Private Bankers Notably Absent From Fed's Symposium This Year
08/21/201409:50:07Bank of America Reaches $16.65 Billion Settlement
08/18/201412:22:47Banks, Retailers Speed Up Drive to Add Chips to Credit, Debit...
08/12/201420:39:13Banks Retreat From Market That Keeps Cash Flowing
08/08/201412:36:06Gemalto to Buy SafeNet for $890 Million
08/07/201409:43:14U.S. Hot Stocks: Hot Stocks to Watch
08/05/201416:10:12Trustees Seek More Time on Citigroup Settlement
08/05/201415:52:28Trustees Get Extension in Citigroup's Mortgage-Securities Settlement
07/30/201410:26:09Charterhouse Selects Banks for Armacell IPO -Reuters
07/29/201421:35:34General Electric's Finance Arm Bulks Up in Canada--Plots & Ploys
07/29/201418:06:25Bank of America Continues to Slash Loans in Russia
07/24/201412:10:09BofA to Pay $16.6 Million to Settle Alleged Sanctions Violations
07/24/201411:22:08BofA to Pay $16.6 Million to Settle Alleged Sanctions Violations...
07/22/201413:13:16Credit Suisse to Exit Commodities Trading
07/18/201418:44:35Rise in Fee-Based Business Helps Boost Broker Productivity
07/17/201401:36:37MARKET SNAPSHOT: Dow Hits Intraday Record; Apple, IBM Drive Gains

Bank of America and other New York Stock Exchange stock quotes are delayed by at least 20 minutes.
All other stock price data is delayed by at least 15 minutes unless otherwise stated.
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Contact Us | Copyright 1999-2007 ADVFN PLC. | Privacy Policy | Investment Warning | Data accreditations | Investor Relations

ADVFNADVFN ItalyADVFN GermanyADVFN FranceADVFN BrazilADVFN JapanADVFN UKADVFN US noad