Long-present unease about soured loans bubbled over on Monday after Bank of America Corp. said it set aside $13.4 billion to cover lending losses even as it posted earnings that beat expectations. Other big banks have also increased loss provisions in the past two weeks.
Major market indicators tumbled more than 3 percent, including the Dow Jones industrial average, which fell 290 points. Bank of America shares plunged 24.3 percent.
Traders had been looking for some pullback after the Dow jumped 24 percent from 12-year lows in early March, led largely by a recovery in banking stocks.
The renewed worries about banks's stability were aggravated by news reports that their lending remains tight and that the government may swap its debt in banks for ownership stakes as its $700 billion bailout fund runs down. - ABC News Story
Well, as the rules continue to change in the Bank Bailout the market reacts. This is the problem when you don't really have a plan.
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