- The Washington Times - Monday, April 20, 2009

UPDATED:

Wall Street posted losses Monday, despite a better-than-expected Bank of America Corp. report on first-quarter earnings.

The Dow Jones Industrial Average closed at 7,841.73, down 289.60 points. The broader Standard & Poor’s 500-stocks Index closed at 832.39, down 37.21 points, and the tech-heavy NASDAQ closed at 1,608.21, down 64.86 points.

The Charlotte, N.C.-based bank reported a first-quarter net income of $4.2 billion — more than triple its 2008 first-quarter earnings. But analysts appeared more focused on the bank’s having to set aside an additional $6.4 billion to cover bad debt.

The company’s stock was down 24.34 percent, to $8.02 a share, at the close of trading.

U.S. markets are trying to continue a six-week rally in which the Dow has gained roughly 24 percent since early March.

Brian Lipps, a Charles Schwab & Co. vice president, said the losses Monday were not unusual, considering the six weeks of gains.

“Still, as the banks go, so goes the broader market,” he said.

Mr. Lipps also said investors still “need to digest” some of the recent first-quarter reports — including roughly 100 out this week — and are concerned about losses, including those from credit cards at Bank of America, the country’s largest bank by assets.

Bank of America reported its Global Card Services had a net loss of $1.8 billion in the quarter.

Bank of America’s report follows better-than-expected reports over the past two weeks by Citigroup, JPMorgan Chase & Co., Goldman Sachs Group Inc. and Wells Fargo, which has bolstered investor confidence about a possible recovery in the U.S. economy, particularly the financial industry.

The S&P and NASDAQ also have gained more than 20 percent since March, when U.S. markets hit a 12-year low. Still, investors are concerned about such factors as banks’ heavy debt, record-high unemployment numbers and the possibility that General Motors Corp. or Chrysler LLC will be forced in bankruptcy.

Also yesterday, software developer Oracle Corp. announced it will acquire Sun Microsystems Inc. for $7.4 billion.

In overseas trading, Japan’s Nikkei stock average rose 17.17 percent. Britain’s FTSE 100 fell 2.49 percent, Germany’s DAX index fell 4.07 percent, and France’s CAC-40 fell 3.96 percent.

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