Bank of America (NYES: BAC) Tumbles
With new jobless claims continuing to disappoint and the financial stocks suffering with earnings in the forefront, Bank of America (NYSE: BAC) slid 18% today as investors and managers looked for answers. Managers of the bank said they were surprised to find heavy losses at Merrill Lynch & Co as they prepared to finalize a merger with the troubled investment bank.
Bank of America led a number of Financial stocks lower today including Citigroup (NYSE:C) and JP Morgan (NYSE:JPM). JP Morgan fell after posting a poor quarter where it's earnings fell 78% compared to the same quarter last year. Citigroup reports tomorrow and is expected to have a loss of close to $10 billion. An amazing number for sure. Citigroup fell 15% today while JP Morgan slid 6%.
The Credit Crisis is not over and the market indexes have now pulled back into a hold position with the Dow Jones Industrial and S&P 500 signaling a sell after providing a buy signal at the beginning of the year. Marshall & Ilsley (NYSE: MI), another financial, tumbled 26% today after scrapping its dividend and restructuring due to credit issues that led to a loss in the most recent quarter. There are few good signs for financial's at this time.
A planned large government bailout by the Democrat controlled congress helped to lift the stock markets in the afternoon today. But the $825 Billion plan is a longer term fix that creates jobs and invests in infrastructure which will take time to affect the profitability of companies. Unlike the Bush Administration's failed plan, this bailout does not attempt to fix the financial's but allows them to wallow in losses for quarters to come.