Bank of America Corporation (NYSE:BAC) hit a fresh 52-week low today after General Electric (NYSE: GE) reported poor banking results for its financial component, GE Capital. Investors were negatively surprised when General Electric blamed its Wall Street "miss" on reduced assets at GE Capital. GE's financial unit, a small division of GE, and a bell weather for the entire financial sector, sent the whole group back down to new lows.
The financial sector, in particular Bank of America, has been beaten down since mid April. The stock reached a low of $11.74 today, valuing the company's market capitalization close to Citigroup levels. These valuations have not been seen since emerging from the 2009 recession lows.
Investor sentiment weakened, as the sell off continued and short sellers moved in. Lawsuits were estimated by one analyst to be over $80 billion for both JP Morgan and Bank of America over home foreclosures.
"I estimate that the lawsuits could come in at over $80 trillion," joked Andy "Raw" Kibbens, co-CEO of The Markets Are Open. "But seriously, this is not the next BP as I heard some people on the Street were saying this morning. BAC has the government's backing. Bernanke knows what he's doing. I have confidence in the US economy."
To read Edwards' full report, click here.
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