Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Why Bank of America Corp (BAC) Shares Are Up Today: JPMorgan Chase & Co. (JPM)

The day before the Federal Reserve releases part two of its stress-test results, which will tell investors what the central bank thinks of proposed capital actions, shares in Bank of America Corp (NYSE:BAC) are up — just barely, which might say something about the stress superbank’s investors are feeling in regards to said tests.

The tale of the tickers
But before we get into that, here’s a quick overview of where B of A, its peers, and the market overall is shaking out so far today, as trading comes to a close:

B of A is up 0.17%.

Bank of America Corp (NYSE:BAC)Citigroup Inc. (NYSE:C) is down 0.33%. (Perhaps that bank’s investors are reacting negatively to CEO Michael Corbat’s decision not to ask the Fed for a dividend increase, despite doing very well on its own stress test.)
JPMorgan Chase & Co. (NYSE:JPM) is down 0.20%, perhaps as its investors are awaiting word on proposed capital actions from the Fed as well tomorrow.
Finally, Wells Fargo & Co (NYSE:WFC) is up 0.34% today.

The market overall is essentially in the green all around, with the Dow Jones Industrial Average at dead zero, the S&P 500 up 0.08%, and the Nasdaq up 0.03%.

All stressed out
Investor stress over the stress tests is one possible cause for Bank of America Corp (NYSE:BAC)’s lackluster performance today, though there really shouldn’t be any stress.

The bank did quite well, better than it did last year. For 2012’s Comprehensive Capital Analysis and Review (the Fed’s official name for bank stress tests), B of A had an actual Tier 1 common capital ratio of 8.7% going in and a 5.7% common ratio coming out.

This year, the superbank went into the CCAR with an actual Tier 1 common capital ratio of 11.4% and came out the other side with a common ratio of 6.8%. Not too bad for a bank still pulling itself out of financial-crisis difficulties.

Likely, Bank of America Corp (NYSE:BAC) will ask the Fed for some sort of capital return to shareholders, as it should. Its CCAR test results put it in roughly the same class as JPMorgan Chase & Co. (NYSE:JPM) and even Wells Fargo.

So stop stressing out, B of A investors, and at the very least, take solace in how well your bank did on the stress tests this year versus last year. Because in the end, a healthy bank that stays in business is the most important thing — dividend increases and share buybacks or not.

Of course, the CCAR may have nothing or little to do with today’s B of A share-price performance. Sometimes the market moves in mysterious ways, with little rhyme or reason. On that note, always remember you’re in this for the long term: This is at the very heart of Foolish investing.

The article Why Bank of America Shares Are Up Today originally appeared on and is written by John Grgurich.

Fool contributor John Grgurich owns shares of JPMorgan Chase. Follow John’s dispatches from the bleeding heart of capitalism on Twitter @TMFGrgurich.The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!