This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bank of America Shares Dip Below $10

Stocks in this article: BAC JPM C

NEW YORK ( TheStreet) -- Bank of America (BAC) shares dropped below $10 amid a sharp selloff in bank stocks Friday afternoon.

Bank of America shares have been on a steady decline since last fall, when investors became concerned about the bank's exposure to legal claims by investors in mortgage backed securities stuffed with home loans that were fraudulent or did not meet the promised underwriting criteria.

Bank of America has already announced more than $12 billion in settlements with various parties related to these "representations and warranties," and last month set aside and additional $5.5 billion toward future claims, while announcing it would record an additional $6.4 billion in "other mortgage-related charges." While Wells Fargo (WFC)and JPMorgan Chase (JPM) are not without their share of mortgage-related pain, Bank of America is in an unfortunate class of its own in this area.

The bulk of the write-downs and losses are the result of Bank of America's 2008 acquisition of Countrywide Financial, a star-crossed deal that cost some $4 billion, but which analysts estimate will end up costing at least $30 billion to clean up.

While second quarter bank earnings got off to an auspicious start on Thursday and early Friday following better-than-expected numbers from JPMorgan Chase and Citigroup (C), bank stocks went south following Citigroup's conference call, when analysts raised questions about higher-than-anticipated expenses. Citigroup CFO John Gerspach said they were due to legal costs and a weak dollar, though he gave few details about the nature of the legal costs.

While at their lowest level in some two years, Bank of America shares are still well above their post crisis lows of early 2009, when they traded below the $4 mark. Bank of America will report second quarter earnings on Tuesday.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs