Bank of America
recorded a 44% drop in earnings for the second quarter, but there were many positives to take away -- and that helped push shares of the bank as well as other financial stocks into the green Monday.
The banking giant was able to
of 53 cents a share, as per Thomson Reuters, by delivering 74 cents a share. Even though the bank had huge write-offs, it also told investors that the
deal would be accretive in 2008, earlier than the original 2009 timeframe. BofA also declared a 64-cent dividend and booked $20 billion in revenue. The stock shot up as much as 10% in early trading, but had settled back to a gain of 6.9% to trade at $29.40.
The NYSE Financial Sector index stayed in positive territory for most of the session, but ended the day just below the flat line at 6,347.56.
Investors bought up shares of
one day before it reports its earnings results. Many analysts expect the bank will drastically cut its dividend and report a dismal second quarter. But the Birmingham-based bank rose 2.9% to $10.40, perhaps lifted on the thought that maybe banks had turned a corner on the huge losses in the credit markets.
American International Group
shot up 5.8% to $26.53 after Bank of America raised its rating from neutral to buy. The analyst suggested that the new CEO will simplify the company and that the market will regain confidence in it as well.
continues to work its way back up the charts; the mortgage funding company started out the week by ticking up 5.5% to $14.13.
One bank that didn't play in the same sandbox was
. The Chicago-based bank tumbled 14.5% to $3.35 as the name keeps surfacing as a potential problem bank. Ever since
failed, analysts have been trying to guess which banks are included in the nettlesome 90 on the FDIC's problem list. The FDIC doesn't identify the banks in order to give the banks the opportunity to right themselves, but analysts are attempting to solve the mystery.
Elsewhere, investment banks all seemed to decline Monday as the group looks ahead to a big earnings day on Tuesday. Regional brokerage
slid 4.7% to $17.32. A Friedman Billings analyst expects the company to report disappointing earnings due to continued trading losses and writedowns. Meanwhile,
edged down 0.3% to $3.65.