April 21, 2009 (FinancialWire) (By Philip Holmes) - Bank of America (NYSE: BAC) held true to its promise to post much better earnings results, as the Dow Jones industrial average ended the trading session at 7,882.43, down 248.909 points, while the S&P 500 index dropped 32.01 points to finish at 837.59. The Nasdaq composite index lost 58.14 points to close at 1,614.93.

Investor concerns seem to go beyond the possible fate of financial sector players, and into scary scenarios involving the potential failure of bailout measures, continuing sluggishness in lending, and what it all means for the broader economy.

At the center of these concerns are banks’ continuing and mounting losses from bad loans, and the Obama administration’s increasing drive to see a return on the taxpayers’ investment in TARP. The intersection of these phenomena spell trouble to investors: banks are not out of the woods despite the bailouts, they will not be able to hide the trauma on their balance sheets, while continued Federal assistance might become stingier, with more stings attached.

Bank of America released its Q1 earnings on Monday, with numbers that beat Wall Street expectations, (with net income of $4.2 billion, or 44 cents a share), but including a damning caveat: the company has increased its loan loss reserve to $30 billion, or double the level of one year ago. BofA also said that its global cards business lost $1.8 billion in the latest quarter.

As Fortune points out, “While BofA has doubled its loan loss reserve, nonperforming assets — loans that are no longer producing income as borrowers fall behind on payments — have more than tripled, reflecting the weakening economy and the acquisition of troubled Countrywide and Merrill Lynch.”

Other big players in the sector, including Citi and Wells Fargo, face similar concerns despite being able to post better-than-expected earnings.

We’ll get more insight in the weeks ahead, as Treasury’s “stress test” results come in. According to reports, experts expect that most banks will pass the tests. But critics have derided the lack of transparency in the process and are now wondering if even “bank friendly” tests, (that assume rather high values for “legacy assets”), will manage to paint the big banks in a favorable light.

The Investrend Earnings Calendar features Altera (NASDAQ: ALTR), expected at $0.16; Bank of NY Mellon (NYSE: BK), expected at $0.63; BlackRock (NYSE: BLK), expected at $0.81; Coach (NYSE: COH), expected at $0.36.

The Investrend Economics Calendar lists Weekly Chain Store Sales (8:55 a.m.).

The Investrend Events Calendar showcases AGU Annual Meeting; ASIA Shareholders Meeting; BPZ, XTO, VNR, PXD at Independent Petroleum Association of America Oil & Gas Investment Symposium New York Conference; C Shareholders Meeting; CF Industries Annual Meeting; CHK at Jefferies & Co. Capital Markets A&D Summit; GR Shareholder Meeting; NTRS Shareholders Meeting; PARD, PCYC, CRIS at American Association for Cancer Research Annual Meeting; V Stockholder Meeting; V, BBY at SourceMedia Conferences Card Forum & Expo; WFR Shareholders Meeting; XATA, CATM, PTEC, AKNS at America’s Growth Capital InfoSec and West Coast Emerging Growth Conference.

The Investrend Money Index is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ 50 Most Actives indicate the direction in which the mass of money is flowing. Last session’s trading showed eight advancers versus 41 decliners and one unchanged. Advancers were led by Sun Microsystems, Inc. (NASDAQ: JAVA) up 36.77%, Financial Bear 3x (NYSE: FAZ) up 30.67%, Ultrashort Real Esta (NYSE: SRS) up 20.87%, Ultrashort Financial (NYSE: SKF) up 20.12%, Dendreon Corporation (NASDAQ: DNDN) up 8.50%, Pt Ultrshrt Sp500 Ps (NYSE: SDS) up 8.29%. Decliners followed Financial Bull 3x (NYSE: FAS) down 30.22%, Fifth Third Bancorp (NASDAQ: FITB) down 24.43%, Bk Of America Cp (NYSE: BAC) down 24.34%, Ultra Real Estate Pr (NYSE: URE) down 20.80%, Ultra Financials Pro (NYSE: UYG) down 20.58%, Amer Intl Group Inc (NYSE: AIG) down 20.37%, Huntington Bancshares Incorpora (NASDAQ: HBAN) down 20.05%, Citigroup Inc (NYSE: C) down 19.45%, E*Trade Financial Corporation (NASDAQ: ETFC) down 17.44%, Wells Fargo & Co New (NYSE: WFC) down 16.09%, Us Bancorp (NYSE: USB) down 14.30%, Amer Express Inc (NYSE: AXP) down 12.98%, Powershares Db Crude (NYSE: DXO) down 12.66%, Dryships Inc. (NASDAQ: DRYS) down 12.55%, Level 3 Communications, Inc. (NASDAQ: LVLT) down 11.29%, Jp Morgan Chase Co (NYSE: JPM) down 10.73%, Alcoa Inc (NYSE: AA) down 9.72%, News Corporation (NASDAQ: NWSA) down 8.77%, Ultra S&P500 Proshrs (NYSE: SSO) down 8.40%, Gen Electric Co (NYSE: GE) down 8.39%, Ford Motor Co (NYSE: F) down 7.75%, Las Vegas Sands Corp (NYSE: LVS) down 7.75%, Companhia Vale Ads (NYSE: RIO) down 7.27%, Dell Inc. (NASDAQ: DELL) down 6.78%, Applied Materials, Inc. (NASDAQ: AMAT) down 6.63%, Nvidia Corporation (NASDAQ: NVDA) down 6.04%.

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Quote of the Day: “If everything seems under control, you’re just not going fast enough.” Mario Andretti

Today is: Kindergarten Day.

Happy Birthday: John Law, Charlotte Brontë, John Muir, Alistair MacLean, John Mortimer, Queen Elizabeth II, Charles Grodin, James Dobson, Iggy Pop, Tony Danza, Nicole Sullivan.

Today in History: Republic of Texas forces under Sam Houston defeated troops under Mexican General Antonio López de Santa Anna in 1836. The New York Giants and New York Yankees played an exhibition game in 1912 to benefit survivors of the RMS Titanic. German fighter ace Manfred von Richthofen, known as “The Red Baron,” was shot down and killed by Allied fire over Vaux sur Somme in France in 1918. Women in France received the right to vote in 1944. Secretaries Day (now Administrative Professionals’ Day) was first celebrated in 1952. Bob Hope’s radio program aired its last segment in 1955. Elvis Presley’s song “Heartbreak Hotel” became the “King’s” first song to reach the top of the Cash Box magazine music charts in 1956. The Seattle World’s Fair (Century 21 Exposition) opened in 1962, the first World’s Fair in the U.S. since World War II. Geraldo Rivera opened Al Capone’s vault on live television in 1986 and found nothing. The first discoveries of extrasolar planets were announced by astronomer Alexander Wolszczan in 1994.

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