NEW YORK (TheStreet) - Bank of America (BAC) shares were poised to take another crack at the $10 mark after eclipsing it on Monday only to drop sharply in late trading on rumors the bank was eyeing a secondary stock offering.
Bank of America shot down the rumors following the close of trading Monday, telling news outlets includingCNBC and Reuters that, "contrary to market rumors [the bank] has no intention of issuing additional equity in a secondary offering."
Following a dismal 2011, Bank of America shares are up more than 70% year to date as efforts to plug its capital hole by selling assets and issuing equity have satisfied regulators and calmed the market. Bank of America's first quarter earnings lit a fire under the stock largely due to evidence of the stronger balance sheet. That new confidence has pushed the shares higher still in recent days after the bank passed the Federal Reserve "stress test."
In the wake of that rally, however, analysts have urged caution. Many argue Bank of America's efforts to strengthen its balance sheet have considerably weakened its earnings potential.At first, the market seemed oblivious to those warnings on Monday as investors pushed Bank of America shares to $10.10, their highest levels since last July. Late in the trading day, however, the stock fell sharply on the secondary market rumors. The stock closed at $9.53. Bank of America shares were slightly higher, however, in pre-market trades on Tuesday . -- Written by Dan Freed in New York. Follow me on Twitter
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