Bank of America shares surged Thursday to their highest closing price since April 2010, joining a broad rally for bank stocks for the second day following Donald Trump’s election victory.
Meanwhile, the Dow Jones industrial average closed at a record high, led by big gains in a few of its 30 components including Goldman Sachs and IBM, beating the all-time high it set in August.
Broader market measures were closing mixed Thursday as several sectors struggled, including consumer goods companies, utilities and phone companies. The Dow rose 218 points, or 1.2 percent, to 18,807.
Since the Republican’s surprising win in the U.S. presidential race, financial services stocks have been rising on prospects of lighter regulation in a Trump administration, including changes to the Dodd-Frank financial reform law signed by President Barack Obama.
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In a report Thursday, analysts with Keefe, Bruyette & Woods said Trump’s victory creates many opportunities but also risks for bank stocks. The possibility of less regulation is among opportunities, the report notes, but it adds there is also much uncertainty about what a Trump presidency will mean for banks. Restrictions on trade will be a negative for U.S. economic growth, which could mean less lending that would especially impact Bank of America and other mega banks, the report says.
“We know very little about president-elect Trump’s policies that will impact financials since ... priorities outside of trade, terrorism and immigration were mentioned less,” the report says.
Even Wells Fargo, which is reeling from a sales scandal, is riding the wave. Shares of the San Francisco-based bank, which maintains its biggest employment hub in Charlotte, were up more than 7 percent to close at $51.63.
That was enough to push the stock above its $49.77 closing price Sept. 7, the day before authorities fined Wells $185 million over its sales practices. The bank’s share price took a hit after the settlement’s announcement.
The Associated Press contributed