Bank of America Soars, but the Dow Takes a Step Back


The markets couldn't rise forever -- even if the continual record highs of the last week and a half made it seem like they could. Even the Dow Jones Industrial Average has been stymied, having lost 45 points, or 0.3%, as of 2:10 p.m. EDT. Most stocks on the blue-chip index are in the red, but after days and days of nothing but green, investors needed a session to catch their breath. Let's check out today's biggest movers and why they're impacting your portfolio.

Bank of America beats back the bears
Don't tell Bank of America that the Dow's trending down today. Shares of the big bank have risen 3.9% to lead the Dow by a mile after B of A announced it would spend $5 billion buying back stock. The bank passed the Fed's stress test, along with most of its rivals on Wall Street, and while some investors may be justifiably concerned about stock repurchases when shares of B of A have risen astronomically over the past year, the stock still trades for 60% of book value. That's relatively cheap compared to some of its banking peers, making now an opportune time to buy back shares before they climb even further.

Bank of America's rivals aren't having the same kind of day, however: Shares of fellow Dow component JPMorgan have fallen 2.1% to lead the Dow lower. A new report from a Senate subcommittee accused the company of ignoring internal controls, among other missteps, while it counted up billions of dollars' worth of losses during the "London Whale" fiasco. It's the latest headache for JPMorgan over this scandal, and it doesn't seem to be going away anytime soon.

Telecom stocks have also fallen despite the arrival of shiny new phones on the market. Shares of Verizon have fallen 1.1%, while rival AT&T has lost 1.3% on the day. The losses come despite yesterday's announcement of the Samsung Galaxy S4 smartphone, which will go on sale in late April for both Verizon and AT&T. The new phone's lighter than the previous installment in the Galaxy series, the S3, although reactions were mixed, and Samsung's stock fell. So far, it doesn't look like investors are particularly impressed by the latest offering.

GE joins the laggards today, down 1.2%. The only big news from the diversified conglomerate is that Malaysia's state investment branch, Khazanah Nasional Berhad, put forth an offer to purchase GE's $1.8 billion stake of the Bank of Ayudhya in Thailand. GE's looking to get rid of its noncore assets, a move it announced with a bang in February when it agreed to sell its 49% stake in NBC Universal to Comcast for $16.7 billion. Investors aren't reacting well to today's news, but with GE spread into seemingly every corner of the economy, divesting businesses like the Bank of Ayudhya is a good move to prevent the company from stretching itself too thin.

For GE, the financial crisis struck a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's infrastructure leader. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE today. To get started, click here now.

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Originally published