Bank of America Shares Rise 10%
Bank of America Corp (NYSE:BAC) shares rose as much as 10% in morning trading on Wednesday after analysts said the bank's capital needs were not as dire as some estimates.
The shares rose to $6.94 in early trading after finishing at $6.30 on Tuesday, their lowest close in two and a half years.
Investors and analysts said the Wednesday rebound was a reaction to the stock dropping 32% since the beginning of August.
"The stock is not out of the woods but the selling has been grossly overdone," said Marshall Front, chairman of Chicago-based Front Barnett Associates LLC.
Front's firm owns Bank of America shares and manages $600 million in assets.
On Wednesday, bank analyst Meredith Whitney and Raymond James bank analyst Anthony Polini said Bank of America's capital needs were not as pressing as some have estimated.
On Tuesday, former analyst Henry Blodget estimated the bank needed as much as $200 billion in additional capital. Bank of America said Blodget was wrong.
Shares of the largest U.S. bank by assets have plunged in recent weeks amid fears the bank still faces billions in costs tied to its large home mortgage portfolio.