Bank of America Corp (BAC): Why The Stock Is Up Today

Closing in on the end of the trading day, Bank of America Corp (NYSE:BAC) share prices are up 0.33%. They’ve been on the climb since last Friday, following a dramatic dip in share prices across all the big banks last Wednesday that I have yet to find a good explanation for.

At the risk of looking a gift horse in the mouth, here are a few thoughts as to why Bank of America Corp (NYSE:BAC) and its big-four peers are doing so much better than they were this time last week.

Hale and hearty all around
But first, here’s a quick overview of the rest of the big four and the markets:

Citigroup Inc (NYSE:C) is up a big 2.61%.

JPMorgan Chase & Co. (NYSE:JPM) is up a healthy 1.21%.

And Wells Fargo & Co (NYSE:WFC) is up a solid 0.63%.

The markets are generally feeling hale and hearty, as well:

The Dow Jones Industrial Average is up 0.90%.

The S&P 500 is up 1.11%

And the Nasdaq is up 1.73%.

Defying expectations
So first, the markets are all up. And when the markets are all up, chances are your favorite stocks, like Bank of America Corp (NYSE:BAC), are going to be up as well. Or is it the other way around? It’s a virtuous circle, is the answer, at least for today. On other days, it’s a vicious cycle, and the markets and your favorite stocks are all down.

Earnings season is about to start, too. To kick things off in the banking sector, JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Co (NYSE:WFC) both report this Friday. This can affect stocks in two ways: Investors feel frightened at what they might hear, or hopeful.

By what we’re seeing with Bank of America Corp (NYSE:BAC)’s performance today, as well as with that of the superbank’s peers, it seems that investors are looking forward to the prospect of first-quarter earnings reports. Going on that theory, Citi investors must be feeling particularly hopeful, and well they should be: Last quarter’s earnings were startlingly good.

But in some ways, Bank of America Corp (NYSE:BAC)’s performance this week is defying expectations. Last Friday news broke that a federal judge signed off on a $2.43 billion settlement Bank of America Corp (NYSE:BAC) made with investors over allegations the big bank misled them when it bought Merrill Lynch. Now, the settlement was reached last fall, so it’s possible the market vented its fury at the deal then, but still, this news could have been a painful reminder.