S&P cuts Bank of America to sell from hold

NEW YORK (MarketWatch) — Standard & Poor’s Equity Research on Friday downgraded
shares of Bank of America Corp. to sell from hold amid worries about the mortgage
portfolio the bank will inherit when it acquires lender Countrywide Financial
Corp. on July 1. “We take unfavorable note of the large Countrywide
option-adjustable rate mortgage portfolio that Bank of America will inherit,
since we believe this portfolio has yet to be stress tested,” S&P said in its
action. The agency also said it expects BofA to “significantly” increase its loss
provisions to reflect a weakening U.S. consumer and predicted a dividend cut. S&Pcut earnings estimates for 2008 for the bank by 51 cents to $2.16 and reduced its
target price by $9 to $24.

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