B of A shares drop again, but other banking stocks rise
Bank of America shares, which traded above $47 in late 2006 and early 2007, were off 16 cents at $6.27 in midday trading in New York, a 2.4% decline.
By contrast, Wells Fargo & Co. was up more than 2%, JPMorgan Chase & Co., Citigroup Inc. and City National Corp. were up more than 3%, and East West Bancorp was higher by nearly 5%.
A strong defender of Bank of America, Rochdale Securities analyst Dick Bove said this morning that B of A has ample capital and that you cannot "break the bank" by driving its stock price lower.
But as Bove notes, there are huge fears in the market that the bank still may have to swallow more bad news related to mortgage loans made by Countrywide Financial Corp., the Calabasas home lender that was near collapse when Bank of America acquired it.
Bove told Bloomberg TV that some people think the bank will have to take losses of more than $100 billion as it is forced to buy back Countrywide mortgage that were bundled up to back securities. He said he believes that exposure is no more than $35 billion.
-- E. Scott Reckard
Photo: The typical Bank of America customer sees no difference when the bank's shares go up or down -- unless he owns shares in the company. Credit: Paul Sakuma / Associated Press