Bank of America Stock Pulls the Dow Higher
May 6th 2013 3:03PM
Updated May 6th 2013 4:05PM
Blue-chip stocks are split this afternoon, with half headed higher for the day and the other half in the red. But the one company most responsible for keeping the Dow Jones Industrial Average in positive territory is Bank of America , the nation's second-largest bank by assets.
Earlier today, it was reported that Bank of America has entered into an agreement with mortgage-bond insurer MBIA in a long-simmering dispute over who will foot the bill for souring mortgages in Countrywide Financial-packaged mortgage-backed securities. The bank will purportedly pay MBIA $1.6 billion for a release of liability; this is roughly half what the company originally sought.
If there's any doubt about how the market is receiving the news, the performance of these companies' shares should speak for itself. With roughly an hour left in the trading session, shares of MBIA are soaring by 41%, while Bank of America's stock is up by 4.3%.
Meanwhile, it's worth noting that the news has helped to quell concern about a new lawsuit that Bank of America is purportedly facing. Over the weekend, the New York attorney general announced his intention to file suit against both B of A and Wells Fargo for alleged violations of the 2012 National Mortgage Settlement, a $25 billion accord reached between five major lenders and officials in 49 states and the federal government.
According to Bloomberg News, the AG's office has documented 339 violations of the accord since last October -- 210 related to Wells Fargo and 129 from Bank of America.
And not to be left out, the nation's largest bank by assets, JPMorgan Chase , is facing heightened pressure from shareholders in the final weeks before its annual meeting later this month.
On Friday, an investment company that represents union pension funds and owns shares of the bank said it plans to vote against the re-election of three directors who sit on the bank's risk policy committee. And over the weekend, Institutional Shareholder Services, an influential proxy advisory company, advised its members to do the same, in addition to voting in favor of a proposal to split the chairman and CEO roles at the bank, both of which are currently held by Jamie Dimon.
Despite this -- or perhaps because of it -- shares of the megabank are trading higher going into the final hour of the session.
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The article Bank of America Stock Pulls the Dow Higher originally appeared on Fool.com.John Maxfield owns shares of Bank of America. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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