Bank of America: Financial Winners & Losers
NEW YORK (
) --
Bank of America
(BAC) - Get Report
, which has been battered by investor skepticism in recent weeks, finally found a defender to help breathe some life into the stock.
Riding to the Charlotte bank's rescue was Morgan Stanley analyst Betsy Graseck, who
argued in a note published Monday
that the shares will rise "in absolute terms" over the next 60 days.
Bank of America shares defied a broad selloff in financial stocks Monday and were up 1.45% to $12.54 in mid-afternoon trading.
One of the reasons for Graseck's optimism was the Nov. 4 dismissal of a lawsuit against Countrywide, which Bank of America bought in 2008. The lawsuit removed $352 billion of $375 billion in litigation exposure the bank had disclosed in its third quarter earnings report, Graseck argues.
Bank of America has been the hardest hit among big banks since investor concerns over banks' potential exposure to litigation over sloppy foreclosure practices came to the fore a few weeks ago. Nonetheless, the issue has rattled investors in many big banks, including
Wells Fargo
(WFC) - Get Report
,
JPMorgan Chase
(JPM) - Get Report
and
Citigroup
(C) - Get Report
.
Those banks were all lower Monday afternoon. Wells Fargo was down 1.13% to$28.89 and JPMorgan was 0.81% lower at $40.61. Citigroup was down by 1.11% to $4.44, which was relatively decent considering
The Wall Street Journal
reported on its front page Monday the bank is the subject of a
Securities and Exchange Commission
investigation into allegations the bank understated the riskiness of certain municipal and mortgage debt funds it sold to investors.
Financial stocks broadly, as tracked by the
Financial Select Sector SPDR
(XLF) - Get Report
, were down 0.87% to $15.45.
Volumes were mostly average across the sector, though mortgage insurer
Radian Group
(RDN) - Get Report
was one notable exception.
Radian's volumes of more than 9 million with two hours left in trading were more than double it trailing three month daily average. Radian's shares fell more than 11% to $8.85, in what a
Bloomberg News
report attributed to worries a $350 million convertible notes offering would dilute equity holders. Mortgage insurers
PMI Group
(PMI)
and
MGIC Investment Corp.
(MTG) - Get Report
were each down more than 5% Monday, though volumes were roughly average for those names.
--
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.
