Bank of America got off easy yesterday after posting a 77% drop in earnings. The stock fell just $1.06, suggesting that investors may have gotten used to big banks routinely announcing multibillion losses every quarter. In B of A's case, the actual write-downs totaled nearly $8 billion, including $1.91 billion for losses from investment banking and another $6 billion from bad credit. Considering the foregoing, the Wall Street Journal's market wrap-up was inscrutable: 'Investors have excused financial firms for some poor earnings reports recently,' the Journal noted, 'but they're not going easy on Bank of America.' (Click on chart to enlarge) Maybe it's a relative thing? After all, when Citi announced a $5.1 billion loss last week, the stock soared. Seen in that light, the two percent markdown of Bank of America shares yesterday might seem pretty harsh. To give B of A it's due, it has taken a few months for big losses to surface, and although many banks have been drowning in red ink since the beginning of the year, B of A's problems, whatever they might be, have barely attracted a dishonorable mention on any top ten lists of troubled banks that we've come across. Perhaps the spin doctors have been grooming it to take over Lehman Brothers if the need should arise? A dirty job, for sure, but someone's got to appear qualified for the task. Short Squeeze Next? The Dow Industrials fared about the same ' which is to say, no worse than prayerful bulls might have hoped. The blue chip average was down a hundred points in the early going, most of the slippage having occurred on the opening bar. But by day's end the Indoos had recouped all but 24 points of the loss, and we'd be surprised if this show of resilience
LATEST TRADES
