Tuesday, October 18, 2011

Stocks up on Bank of America earnings

     Bank stocks are up today after Bank of America posted better than expected earnings.  Bank of America stock was up almost 7% today in early trading.  The big positive surprise was Bank of America's revenue, which was  28.7 billion, increasing even in a tough quarter for most banks.

     Profit per share was .56 which was helped by a 9.8 billion gain for selling it's stake in China Construction bank.  Bank of America's core business appears to be shrinking however as it's net interest margin dropped to 2.32%.  Net interest margin is the difference between what it pays depositors for use of it's cash versus what it charges for loans.  Net interest income which is the bread and butter for banks shrank to 10.7 billion from 12.7 billion a year ago.  Bank of America stock has fallen more than 50% this year.

     In other earnings news, IBM's shares were down 4.5% in the early going after posting in line results.  Investor expectations were high for IBM after it rallied to a record high close a few days ago.   Analyst's were disappointed with the earnings which showed that IBM may have slower growth in the future.  IBM posted revenue of 26.2 billion for the quarter and profits of 3.28 a share.  IBM stock has risen more than 20% this year.

     The overall markets are higher today as of 8 AM PST after earlier being down almost 1%.  After the bell we get AAPL earnings which I will be watching closely.

Market Recap
     The market looks like it wants to break out but it hasn't yet.  The SNP 500 blasted above the 1220 level today on a report in the financial times that the Europeans are going to lever up the EFSF fund from 400 billion to 2 trillion dollars.  The market finished right at my little red line which is resistance right now.


     Still waiting for AAPL earnings which should be coming soon.  I ended up buying some today at around 421 and am looking for great earnings to propel this stock to 450.  We are bumping up against resistance right now so these earnings will determine whether they blast past resistance or fall back once again. 

     OUCH!  AAPL just came out with earnings and it was a big disappointment.  AAPL reported earnings of 7.05 vs 7.39 expected.  The stock dropped 35 dollars immediately after the report almost 10 pct and I am now .5% poorer.  :(  Check out the 5 minute chart including after hours trading.  As you can see we hit 389 dollars in afterhours. 

 


Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

13 comments:

  1. This is all good news buddy. Thanks for sharing all this.

    ReplyDelete
  2. Sounds like everythings getting better. But for how long?

    ReplyDelete
  3. Did the card fee fiasco have any affect on the earnings?

    ReplyDelete
  4. @AllenTesch

    I'm not sure what affect the card fee fiasco had on earnings. I'm guessing it did not affect them that much because they announced the fee late in the quarter. We will see next quarter if people are leaving BAC because of the fee.

    ReplyDelete
  5. Oh wow, that was a crazy(?) hit for Apple. I wouldn't have expected a -10% right after the quarter reports. I mean, i din't thought it would be that big.

    ReplyDelete
  6. Bitter sweet for me. I mean BoA.. But if it helps.

    ReplyDelete
  7. Tomorrow they will be going down again...

    ReplyDelete
  8. thanks for sharing.
    cool reports :)

    ReplyDelete
  9. Bank of America is a good buy down here 5.23 was the bottom

    ReplyDelete