The U.S. Labor Department reported that the U.S. economy added 227,000 nonfarm jobs during February, declining from an upwardly revised increase of 284,000 in January, while the unemployment rate remained at 8.3%. This was the first time since early last year that payrolls have grown more than 200,000 three months in a row. In its daily economic commentary Deutsche Bank pointed out that the payroll numbers "have been revised higher in 19 of the past 20 months, which is consistent with what has transpired in the early stages of most economic cycles."
The The KBW Bank Index (I:BKX) pulled back from earlier gains and was up 1% to close at 45.72, with all 24 index components rising for the day, except for Bank of America (BAC - Get Report), which was down a penny, to close at $8.05.
The Wall Street Journal on Friday reported that Bank of America was negotiating with regulators to avoid $850 million in penalties -- part of the $25 billion mortgage foreclosure settlement between federal regulators, states' attorneys general, and the largest loan servicers, announced on Feb. 9 -- by offering loan modifications, including principal reductions, to 200,000 borrowers.A Bank of America spokesman told the Journal that the average balance reduction would be more than $100,000. While the full details of the plan have not been released, it's quite possible that investors holding mortgage paper backed by the mortgages Bank of America wishes to modify, may have other ideas.