This Day On The Street
Continue to site
ADVERTISEMENT
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

Bank of America: Economic Growth Winner

NEW YORK ( TheStreet) -- Bank of America (BAC - Get Report) was the winner among the largest U.S. banks on Thursday, with shares rising 3% to close at $11.52.

The broad indexes advanced despite another day of pessimism over the Fiscal Cliff negotiations in Washington. One day after the Whitehouse said that President Obama would veto a proposal by Speaker of the House John Boehner to avert the fiscal cliff by limiting the increase of federal income tax rates to increase on couples earning $1 million or more per year, if a bill to that effect were passed by the House of Representatives and the Senate, Boehner seemed to draw a line in the sand for Republicans.

Boehner announced during a press conference that his "Plan B" to avert the fiscal cliff would be voted on by the House later on Thursday.

Investors shrugged off the Fiscal Cliff, at least for the day, as the positive flow of economic reports continued. The Bureau of Economic Analysis said that its third reading for third-quarter GDP growth was 3.1%, increasing from its previous estimate of 2.7%. Of course, the fourth-quarter is likely to show a slower GDP growth rate because of Hurricane Sandy.

The National Association of Realtors reported that existing-homes sales rose 5.9% to a seasonally adjusted annual rate of 5.04 million in November from a downwardly revised 4.76 million in October. The consensus was for November sales at an annual rate of 4.87 million, according to Briefing.com. November sales were up 14.5% from a year earlier.

The KBW Bank Index (I:BKX) was up over 1% to close at 51.90, with al 24 index components showing gains, except for Huntington Bancshares (HBAN), which was down a penny to close at $6.39.

Bank of America's shares have now returned 108% year-to-date, following a 58% decline during 2011. Despite the remarkable run this year, the shares are still down 13% since the end of 2010.

The shares are still discounted, at 85% of their reported Sept. 30 tangible book value of $13.48, however, the shares appear relatively expensive in the current environment for large-cap bank stocks, at 12 times the consensus 2013 EPS estimate of 96 cents, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $1.25.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
BAC $16.44 2.05%
AAPL $128.70 -0.19%
FB $78.81 -0.23%
GOOG $540.66 0.51%
TSLA $230.65 2.00%

Markets

DOW 18,070.40 +46.34 0.26%
S&P 500 2,114.49 +6.20 0.29%
NASDAQ 5,016.9290 +11.5380 0.23%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs