Massachusetts subpoenas Bank of America documents

Massachusetts subpoenas Bank of America documents

Stock Market Predictions

(Global Markets) - Massachusetts securities regulators said on Friday that they were subpoenaing Bank of America Corp for documents to determine whether the lender had knowingly overvalued assets in some investment products.

Local investors lost about $150 million in investment vehicles structured by the company's affiliate Banc of America Securities LLC, said William Galvin, the state's top securities regulator.

Now his office is asking the Charlotte, North Carolina-based bank to supply documents for its activities involving collateralized loan obligations.

The CLOs include LCM VII Ltd and Bryn Mawr CLO II Ltd, which were structured by the bank and sold to investors in 2007.

Bank of America spokesman Bill Halldin said the bank doesn't comment on regulatory inquiries, except to say that it cooperates fully with them.

Galvin, who has been especially aggressive in looking into how big banks hurt small investors during the housing crisis and financial crisis, said he wanted to find out whether the issuer "was knowingly overvaluing assets in the portfolio to get them off their books and onto investors."

The news comes one day after Bank of America and other large lenders agreed to a $25 billion settlement over alleged foreclosure abuses.

The company's shares were down 1.3 percent at $8.07 in afternoon New York Stock Exchange trading.

(Reporting By Svea Herbst-Bayliss and Rick Rothaker; Editing by Lisa Von Ahn and Gerald E. McCormick)

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Home Depot, Walmart, grocers get boost from Irene

Home Depot, Walmart, grocers get boost from Irene

Stock Market Predictions

NEW YORK (Global Markets) - Hurricane Irene sent East Coast shoppers into stores to stock up on essentials this week, instead of the clothes, notebooks and other supplies that retailers were counting on selling as children get ready to go back to school.

Chains such as Home Depot Inc (HD.N) and Wal-Mart Stores Inc (WMT.N) were doing brisk business on Friday, selling water, flashlights, batteries and other goods in states standing in Irene's potential track from the Carolinas to Massachusetts.

"Most probably, the biggest demand right now is for generators, obviously," said Suzanne Roche, manager of a Sears (SHLD.O) store in Wilmington, North Carolina. "We have got customers calling nonstop."

Irene is due to make its first U.S. landfall in North Carolina on Saturday. The storm, which battered Atlantic and Caribbean islands including the Bahamas and the Dominican Republic, is then expected to head to the densely populated Northeast.

Those who were not trying to squeeze in one last summer stay on the New Jersey shore or Long Island beaches may have been planning to go to shopping malls to buy clothes, shoes and other items for children who will soon head back to school. Now those plans will be on hold.

"Nobody is going to go to a mall to buy a pair of jeans," said Richard Hastings, consumer strategist at Global Hunter Securities.

The back-to-school shopping season is the second-largest spending time for U.S. shoppers, behind the winter holidays.

The storm may dent the upcoming index of August sales at stores open at least a year by 1.5 percentage points, Hastings said.

About two dozen retailers, including department stores and apparel chains, are due to report monthly same-store sales on September 1. Analysts were expecting a 4.8 percent rise for August, Thomson Global Markets said on Friday.

The storm could hurt retailers like Saks Inc (SKS.N) and Tiffany & Co (TIF.N) if airports stay closed for too long or people cancel trips, said Morningstar analyst Paul Swinand. The hurricane hitting on a weekend worsens its impact, he added.

That pain may be compounded following New York Governor Andrew Cuomo's announcement that New York City's subways, buses and commuter lines, which serve 8 million riders a day, will shut down around noon on Saturday.

Chains such as Target Corp (TGT.N) planned to keep their stores open as long as it is safe for shoppers and workers, and to comply with any evacuation orders.

Walgreen Co (WAG.N) said it would keep many stores open 24 hours a day to meet demand for supplies. It was still deciding which stores may close because employees might not be able to get to work.

Retailers kept shoppers informed online.

Home Depot, Rite Aid Corp (RAD.N) and other chains posted details on their websites.

Whole Foods Market Inc (WFM.O), known for its array of organic and natural products, was communicating with customers through local stores' Facebook pages and other social media.

After rumors spread in West Hartford, Connecticut, that all local stores were out of water, employees of a Whole Foods there took pictures of all the water they had in the store and posted them on the Facebook page, a spokeswoman said.

POTENTIAL MARKDOWNS

If retailers have excess merchandise because they lose out on a weekend of the back-to-school shopping season, it "could lead to markdowns in September and October," said Keith Jelinek, a director of AlixPartners' global retail practice.

Hastings expects Home Depot to do well, as it has 35 percent more stores than Lowe's Cos Inc (LOW.N) in the affected region. He also expects Newell Rubbermaid Inc (NWL.N) to benefit from demand for storage containers.

Newell shares rose about 1 percent on Friday. Among battery makers, Energizer Holdings Inc (ENR.N) was up almost 2 percent, and Spectrum Brand Holdings (SPB.N) gained nearly 3 percent.

Drugstores and grocery stores should also see a sales lift.

"It helps the supermarkets most because people really stock up," said BB&T Capital Markets analyst Andrew Wolf, noting Supervalu Inc's (SVU.N) strength in Boston and Philadelphia, and Safeway Inc (SWY.N) and Ahold's (AHLN.AS) big presence in Washington.

Great Atlantic & Pacific Tea Co Inc (GAPTQ.PK) is stocking extra water, ice, bleach and other goods at its A&P, Waldbaum's and Pathmark chains.

WATER GOING QUICKLY

In particular, Irene could affect companies with a strong presence on the East Coast in terms of higher sales before the storm and potential closings once it hits.

BJ's Wholesale Club (BJ.N) said 96 of its 190 stores are in the storm's expected track. They are receiving extra deliveries of items such as batteries, flashlights, generators and groceries, and the Massachusetts-based company's buyers are working to get water delivered to those locations.

Wal-Mart, which has an emergency operations center in its Bentonville, Arkansas headquarters, is tracking how the storm may affect roughly 600 of its stores and distribution centers.

It has also offered its help to governments in states such as New York, where hurricanes are less common.

"This is obviously not something that they probably plan for on a regular basis," said Mark Cooper, Wal-Mart's new senior director of emergency management, "so we just want to make sure that they know we are available to assist."

(Reporting by Dhanya Skariachan, Phil Wahba and Ernest Scheyder in New York; Jessica Wohl and Brad Dorfman in Chicago. Writing by Jessica Wohl. Editing by Robert MacMillan.)

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Bank of America grants CEO $6 million in restricted stock

Bank of America grants CEO $6 million in restricted stock

Stock Market Predictions

(Global Markets) - Bank of America Corp (BAC.N) has granted Chief Executive Officer Brian Moynihan restricted stock worth nearly $6 million, although the company must meet performance goals for much of it to pay out, according to a securities filing on Friday.

The stock grants are incentive pay doled out as part of the CEO's 2011 compensation package. For 2010, Moynihan received $9.1 million in performance-based stock.

In 2011, Bank of America earned $85 million in net income applicable to common shareholders, as the second largest U.S. bank sold off assets and took mortgage-related losses. It was the bank's first profitable year under Moynihan, who took charge in January 2010.

The bank's shares fell 58 percent last year as investors worried about whether the company had enough capital to absorb mortgage-related losses and meet new international standards. This year, the stock is up 44 percent, as the concerns eased. The shares closed Friday at $8.02, down 0.9 percent.

Moynihan did not receive a cash bonus for 2011 and did not receive an increase in his $950,000 base salary, a person familiar with the situation said on Friday. The stock grants disclosed on Friday equal all of the incentive-based pay he received for 2011, the person said.

The Charlotte, North Carolina-based bank will disclose more information about executive pay in its proxy filing next month.

Moynihan received 532,705 performance-based shares, worth $4.1 million as of Wednesday's grant date. These shares vest only if the bank meets unspecified performance measures.

The shares cannot be paid out until March 1, 2015. If they are not earned by December 31, 2016, they expire.

Similar performance-based shares granted by the bank last year required the company to post a minimum return on assets - net income compared with total assets - of 0.5 percent on a rolling annual basis. In the first year for that grant, the bank did not meet the minimum hurdle.

Moynihan also received 228,302 stock units this week that will vest in 12 monthly portions and be paid out in cash, based on the company's stock price, starting in March. As of Wednesday's grant date, they were worth about $1.8 million. He did not receive this type of stock for 2010.

Seven other Bank of America executives also received various stock grants this week, according to securities filings on Friday. Co-chief operating officer Tom Montag, a former Merrill Lynch executive who runs capital markets and investment banking operations, received the largest performance-based stock grant, worth about $7.1 million. That was down from a $14.3 million grant for 2010.

Net income in Montag's global banking and markets unit fell by more than half to $3 billion in 2011 from $6.3 billion in 2010, as investors and corporations pulled back amid uncertainty over the European debt crisis.

Some senior executives who report to Moynihan received cash bonuses for 2011, the person familiar with the situation said. Performance-based stock grants, however, made up the largest portion of their incentive pay, the person said.

In January, Bank of America said it would issue as much as $1 billion in stock to certain employees in lieu of a portion of their cash bonuses. Unlike restricted stock grants, however, the shares would be immediately tradable. Bonuses were paid out to employees this week.

(Reporting By Rick Rothacker; editing by Andre Grenon)

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