Tuesday, February 22, 2011

Bank of America (BAC) Continues Plunge on $20 Billion Writedown

Bank of America (NYSE:BAC) shares tumbled Tuesday, a day after the largest U.S. bank said it was writing down goodwill for a credit card unit by $20 billion, double the previously announced amount.

BofA shares were down almost 4 percent on the New York Stock Exchange. The KBW Bank Index (KBE) was also lower.

Analysts and investors said the surprise writedown — despite not causing the entire bank to restate earnings or affect its capital ratios — spooked investors.

"This was unexpected and should have been handled better," said Matt McCormick, a portfolio manager with Cincinnati-based Bahl & Gaynor Investment Counsel.

McCormick does not own shares in U.S. banks, but does own shares in Canadian banks.




Source: CNBC

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