Why Bank of America Shares Jumped on Monday
In sharp contrast to their recent sell-off, Bank of America (NYSE: BAC) shares ended Monday's session up 5%, leading stocks of similarly sized banking peers like Citigroup, Wells Fargo, and JPMorgan Chase. The groupwide effort led by BofA suggests investors are starting to let go of worries of a sweeping liquidity crisis for the nation's banking system.
Don't look for a company-specific reason for the jump. You won't find one. You're more likely to feel or sense one in the wake of First Citizens' (NASDAQ: FCNCA) intended acquisition of most of the banking assets of SVB Financial (NASDAQ: SIVB), which is parent to failed banking name Silicon Valley Bank.
While SVB's shareholders and bondholders are, essentially, officially wiped out by the sale -- which would have been to another bank if not First Citizens -- the deal ends an ugly saga without any other banks being forced into collapse. Investors as well as customers of all other banks can at least breathe a little easier now that the matter hasn't grown into an industrywide contagion.
Source Fool.com
