Bank of America: Financial Winner
NEW YORK (TheStreet) -- Bank of America(BAC) was the winner among the largest U.S. financial names on Wednesday with shares rising nearly 4% to close at $8.86.
The broad indexes all gained at least 0.7%, ending a five-day losing streak. Spanish 10-year bond yields settled on Wednesday at 5.86%, after spiking to 5.94% on Tuesday, shedding light on investors' continued fears over Europe.
Credit Suisse analyst Andrew Garthwaite said early on Wednesday that "private sector leverage in Spain is 230% of GDP and has so far fallen by just 9% of GDP and we would expect it to fall by another 40% of GDP."
Garthwaite added that, with private sector leverage declining, Spain's "government debt to GDP of 70% could easily end up at 100%," and that fiscal tightening of 4-5% is "unlikely to occur until May at the earliest, suggesting a delayed hit."
Still, Credit Suisse said "there is a clear political commitment to tackle the deficit, reform and deleverage the private sector," in Spain, which "will ultimately make it politically feasible for core Europe to support" the country.
Back home, the Federal Reserve published its Beige Book report, saying the feedback from its twelve district banks "on balance suggest(s) ongoing improvement in economic conditions in recent months, with most Districts highlighting more favorable conditions than identified in reports from the late spring through early fall."
The KBW Bank Index (I:BKX) rose 2.1% to close at 47.80.
Meantime, Bank of America's shares have now returned 60% year-to-date, following a 58% decline during 2011.