Bank of America stock surges after it reassures over capital

 
Steve Dinneen
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BANK of America shares rebounded yesterday with their second-largest price increase this month after analysts said its capital needs are not as dire as some had feared.

It closed up 11 per cent, or 69 cents, at $6.99 after finishing at $6.30 on Tuesday, the stock’s lowest closing price in two and a half years.

The bank’s shares posted their largest one-day gain since 9 August, the day after Bank of America shares plummeted 20 per cent.

Marshall Front, chairman of Front Barnett Associates said: “The stock is not out of the woods but the selling has been grossly overdone.”

BofA said in a memo to staff that rumours it may be sold to rival JP Morgan were “baseless” and that they “don’t even make practical sense”, adding that it has enough capital to operate its business.