In big turnaround, Bank of America stock soars
The shares, which fell to a two-and-a-half-year low of $6.30 on Tuesday, jumped as high as $6.97 on Wednesday morning before backing off a bit. They were up 59 cents, or 9%, at $6.89 in early afternoon trading in New York.
Hammered by short sellers, who make money when stocks go down, Bank of America stock took its latest blow this week when a blog said it might need $100 billion to $200 billion in new capital.
The bank issued a point-by-point rebuttal, saying blogger Henry Blodget had gotten his facts entirely wrong. Many observers agreed, with RBC Capital Markets analyst Joe Morford saying the stock price "has been detached from the fundamentals" and is now trading on rumors.
Independent bank analyst Meredith Whitney helped touch off the rally in BofA shares Wednesday morning by telling Bloomberg radio that the bank has no urgent need to raise capital and that Chief Executive Brian Moynihan is "the right guy for the job."
-- E. Scott Reckard
Photo: Bank of America headquarters in Charlotte, N.C. Credit: Davis Turner / Getty Images