Shares of Bank of America Corp. (BAC, Financial), a multinational investment bank and financial services company, are up over 2.2% since Monday, Sept. 17. The stock was up 2.62% on Wednesday, trading at $31 a share.
Treasury yields rose on Wednesday, pushing bank stocks higher, helped by positive housing data.
Benchmark 10-year U.S. Treasury yields rose above the 3% mark on Tuesday, and the benchmark rose to its highest level in four months on Wednesday. Two-year rates hit their highest level in over a decade, reaching 2.8%.
Banking stocks are influenced by rising market interest rates.
Yields also rose on U.S. homebuilding data, which showed homebuilding rose more than expected in August. Housing starts rose 9.2% from July and increased by 9.4% from a year prior. A boost in housing data is an indicator of the market rebounding.
The stock was unaffected by an announcement from U.S. regulators that Bank of America will pay a $30 million penalty for attempted manipulation. The manipulation reportedly occurred between January 2007 and December 2012, alleging that the bank made false reports and attempted to manipulate the U.S. Dollar International Swaps and Derivatives Association Fix.
Bank of America said the company has “significantly increased” its procedures to detect inappropriate behavior.
The bank also agreed to sell its alternative investment feeder funds businesses to iCapital Network on Tuesday. The terms of the deal were not disclosed, but it is expected to close in the first half of 2019. Bank of America’s feeder funds handle around $20 billion in client holdings.
The deal is an attempt by CEO Brian Moynihan to streamline the bank’s operations. Bank of America has been evaluating how iCapital conducts business for nearly a year to understand how the sale will impact its own customers. According to the company, iCapital will be hiring 22 Bank of America employees to help with the transition, and the bank will still be involved in sourcing and distributing feeder funds.
The bank released its most recent earnings report on July 16, reporting that net income rose 33% from the prior-year quarter to $6.8 billion. Total revenue fell 1% to $22.6 billion.
Client balances were a strong point in the second quarter highlights, with average loans and leases rising by 5% as a whole. Consumer balances rose 6% as more consumers apply for credit online.
The company is scheduled to report third-quarter earnings on Oct. 12.
Disclosure: The author does not have any stake in the listed equities.
