NEW YORK (
) -- Most bank stocks were strong on Wednesday, driven by strong housing numbers, while the broad indexes saw only slight gains.
both declined sharply as their third-quarter results underlined the
decline in PC sales
Meanwhile, shares of
Bank of America
(BAC - Get Report)
were down two cents to close at $9.44, after the company reported a
, as several items preannounced in September took their toll, including a pretax charge of $1.6 billion from an agreement to settle a 2009 lawsuit with investors related to the acquisition of Merrill Lynch, in addition to a charge of $800 million related to changes in the UK corporate tax rate, and $ $1.9 billion in debit valuation adjustments (DVA) and fair value option (FVO) adjustments.
The above items all matched the preannounced numbers, and Bank of America reported third-quarter net income of $340 million, breaking even on a per-share basis, and beating the consensus estimate of a seven-cent loss, among analysts polled by Thomson Reuters.
Following Bank of America's earnings release, Stifel Nicolaus analyst Christopher Mutascio wrote that the company's better-than-expected results were mainly driven by "1) better than expected mortgage banking revenues of $2.02 billion (versus our estimate of $1.58 billion) 2) better than expected investment banking revenues of $1.34 billion (versus our estimate of $1.09 billion) 3) lower than expected provision expenses of $1.77 billion (versus our estimate of $2.13 billion), and 4) $339 million in investment securities gains."
Mutascio said that the above items added nine cents to BAC's bottom line. The analyst rates Bank of America a "Hold."
The U.S. Census Bureau reported that estimated housing starts during November increased to a seasonally adjusted annualized rate of 872,000, which was a 15% increase from an upwardly revised 758,000 in August. The pace of housing starts in September increased 35% from September 2011.
The Census Bureau also reported that estimated housing permits increased to an annualized rate of 894,000 during September, increasing 11% from the previous month, and a whopping 45% from a year earlier.
KBW Bank Index
rose 2% to close at 51.06, with all but four of the 24 index components showing gains for the session.