Why Bank of America's Leading a Sleepy Dow
May 6th 2013 2:37PM
Updated May 6th 2013 4:00PM
So much for the triple-digit gains investors welcomed last week. Markets are flat this Monday, and the Dow Jones Industrial Average is nursing the hangover of last week's stock market party. As of 2:25 p.m. EDT the Dow has gained just 12 points, or less than 0.1%, with stocks fairly evenly split between risers and fallers. Big banks have had a good day so far, but outside of the financial sector, few blue-chippers are making waves today. Let's catch up on the stories you need to know.
Financials on the upswing
Bank of America shareholders aren't suffering a case of the Mondays today: The stock is up 4.6% to lead the Dow higher. The firm settled a legal dispute with MBIA today, with B of A reportedly set to pay $1.6 billion to the latter in order to resolve the disagreement.
All is not well, however: The New York attorney general announced plans today to sue Bank of America and Wells Fargo, alleging that the two institutions repeatedly violated a $25 billion mortgage settlement. It's another PR smudge that B of A doesn't need as it works to escape the shadow of the recession and financial crisis.
Speaking of financial firms under scrutiny, shares of JPMorgan have risen 1.4% today, even as advisory firm Institutional Shareholders Services pushed company shareholders not to back the re-election of three board members due to lack of oversight during JPMorgan's London Whale losses. ISS also pushed a proposal for CEO and chairman Jamie Dimon to give up one of his titles, citing the company's size and need for independent oversight considering London's trading losses of more than $6 billion.
Outside of financials, health care stocks are having an up-and-down day. UnitedHealth Group got a boost from JPMorgan earlier after a company analyst upgraded the stock to "Overweight," citing a low-risk membership base as compared to the industry. The move sent shares of UnitedHealth up 2.6%, making the stock the second-leading pick on the Dow today. With Obamacare set to levy an uncertain future on the health insurance industry, size matters more than ever -- and UnitedHealth's position as the largest health-insurer in America, with 42 million total medical members, entrenches it as one of the safest insurance picks for risk-averse investors.
On the other side of the Dow, fellow health care company Merck isn't having such a good day. Shares of the big pharma have fallen 1.1% to lead the Dow laggards today despite a lack of news on the company. Merck still faces questions on how it will rebuild sales lost from patent expirations on leading drugs such as Singulair. A recent earnings miss didn't help investor attitudes toward this company's future, particularly as star diabetes medication Januvia badly missed analyst sales expectations. Merck has plenty of ground to make up in the near future to overcome investor doubts, and it will need its blockbuster therapies to lead its sales growth.
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The article Why Bank of America's Leading a Sleepy Dow originally appeared on Fool.com.Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group and Wells Fargo. The Motley Fool owns shares of Bank of America, JPMorgan Chase & Co., 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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