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Two Ways To Play: Bank of America Emerges from TARP


Strengthen your portfolio in good times and bad.


BAC emerges from TARP

Bank of America (BAC) announced today that it will repay the entire $45 billion investment provided by US taxpayers under the Troubled Asset Relief Program (TARP).

In a press release, Bank of America said it has already paid $2.54 billion in dividends to the US Treasury to date and the move will save the company an estimated $3.6 billion in annual dividend costs.

It's the latest in a series of steps the bank has done to reduce its reliance on the government. Other actions include paying the US government $425 million to terminate a term sheet that would have guaranteed up to $118 billion in assets, as well as exiting a number of other government bailout programs this year. Shares of Bank of America are up over 4% in the premarket.

From the Bull Pen: There's a bit of resistance in the near term for Bank of America near $16.50. But it likely won't hold especially when taking a longer-term view. Those bullish can set a sell stop below recent lows (near $15.20).

From the Bear Cave: Bears can consider a downside play in bonds. Consider the Ultrashort 20+ treasury ETF (TBT). A sell stop can be set below recent lows ($44.30).

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check around the World

Asian trading closed with the Nikkei 3.84%, India 0.09%, Hang Seng 1.19%, Shanghai -0.16%, and Taiwan 0.09%.

Across the pond, we see the FTSE 0.40%, CAC 0.56%, DAX 0.58%

As of 8:15 AM EST, S&P Futures are trading +5.00 to 1113.25. Nasdaq futures are +3.000 to 1794.50.

A Look at Commodities

Over in commodities, crude oil is +0.61 to 77.21 while gold is +6.000 to 1219.00 this morning. Silver is -18.5 to 1911.0 and copper -1.250 to 321.90.

The dollar Index is -0.2350 to 74.4700.

On the Radar


08:30 Initial Claims 483k. cons.
08:30 Continuing Claims
08:30 Productivity 8.5% cons.
08:30 Employment Cost Index
10:00 ISM Services 51.4 cons.

Click here for the full trading radar.

Good luck today!

No positions in stocks mentioned.

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