Technicals and ongoing negative perceptions weigh on B. of A.
By Greg Morcroft, MarketWatch
NEW YORK (MarketWatch) — Bank of America Corp. led financial stocks lower on Monday as investors paused in the stock’s attempt to reach $10, a milestone the shares haven’t seen since March.
That weighed on the sector, but so too did some cooling off from big sector gains in the immediate wake of the Federal Reserve’s recent, latest bond-buying plan.
The Financial Select Sector SPDR ETF XLF +0.13% , which tracks the financial stocks in the S&P 500 SPX -0.30% , shed 0.1% in early action.
The financial stocks in the Dow Jones Industrial Average DJIA -0.24% also all fell. Bank of America BAC +0.31% was the biggest decliner, shedding 1.3%, followed by American Express Co. AXP -0.50% , which lost 0.4%.
Bank of America shares have moved a lot higher in recent weeks, and the shares are meeting resistance as they near $10. The shares last traded above $10 back in March, when on the 19th of that month they hit their 52-week high of $10.10.
The Web was full of chatter about Bank of America. Seeking Alpha posted some commentary discussing some recent new directors that started with a negative tone.
The commentary opened with, “Bank of America still hasn’t cleaned up its act. While the Charlotte, N.C.-based financial services heavyweight recently took the laudable step of adding two more women to its board, all four of the new directors it named are associated with controversial companies. The management’s poor corporate governance puts Bank of America at high risk of experiencing regulatory problems, which continue unabated.” See: Seeking Alpha story on BofA.
And in an interesting comment on the times, the New Haven Register, the Connecticut paper ran a story about the company’s attempts to resolve a mortgage modification dispute with homeowners.
According to the paper, “Bank of America offered the couple a chance to modify the loan on the Jones Street house they’ve owned for 10 years in order to make payments more manageable, but only with conditions that include essentially agreeing to a gag-order when it comes to the deal and the financial institution. That means keeping quiet about opinions of the bank on Facebook, blogs, websites and in the media, and taking down any existing postings — something that may be unexpected in a document relating to a financial matter.” See: New Haven Register story on BofA.
Bank of America shares, whose pullback started last week when the stock lost about 2%, have gained 11% over the last month, and 14% over the last three months.
J.P. Morgan Chase & Co. JPM +0.66% and Travelers Cos. TRV +0.20% both fell 0.3%.
Greg Morcroft is MarketWatch's financial editor in New York.
