Bank of America Slides on $1.21 Billion Fine as Chip Stocks Tumble | Closing Bell

And right now we are two minutes away from the end of the trading day. Romaine Bostick taking you through to that closing bell. It's a global simulcast. We're joined now by Carol Massar and Tim Novak. Welcome to our audiences across all of our Bloomberg platforms, television and radio. Our partnership with YouTube, on a day when investors from stocks to bonds and everything in between. A bit rattled for a wide variety of reasons. Yeah, a bit of a risk off trade. No doubt about it. A hot inflation print. Uh, I think concerns too, about higher energy prices. What's the fed going to do? I'm going to say though, you go inside the S&P 500 remain. It's still kind of an even split here okay. Not so much for the Nasdaq 100 which is taking the brunt of this I think I can call it a sell off. Remain at one point today. Actually right now this is the worst day for the Nasdaq 100. It's down more than 2% going back to June of this year. Yeah. We should point out the Russell 2000 down 2% are firmly in correction territory. Remember that last record high was back in mid August down I believe about 11% or more since then. And have you taken a look at bank stocks. Yeah. Listen we're going to talk about that. I could see the trading day. So but the trade in banks stocks. Over the last couple of days, you've seen rallies, you've seen them pull back, but overall not doing well. Yeah, not doing well. And I mean a lot of it is I mean and we should point out this started long before this earnings season. Yeah. We've seen a lot of pressure there primarily because of the rate environment concerns about credit. And I guess it was kind of prescient because it started to show up in the earnings statements and more importantly, in some of the commentary that we heard, uh, out of, uh, Jamie Diamond and Jane Frazier and, uh, everyone else in between. Yeah, absolutely. And you're seeing it play out when you look at that group and the trade that we've seen, investors definitely pulling back remain. Well, we get the closing bell, uh, here in New York, a third straight day of softness and really a lot more than softness here. Uh, on this, uh, Wednesday afternoon, with the S&P 500 lower by more than 80 points, that's going to be a decline of about 1% on the day as we wait for these numbers to settle. Uh, the least dirty shirt in the drawer right now is the Dow Jones Industrial Average is down about 48 points, or about a 10th of a percent. But let's go to the big decliners here. Obviously the tech space really taking it on the chin. The Philadelphia Semiconductor index down about 4% on the day, the Nasdaq Composite and the Nasdaq 100, each down about 2% on the day. And the Russell 2000 very rate sensitive a Russell 2000 small caps that have been under pressure for weeks now, closing down about 2% and now down more than 11% from its last all time high sit hit back in mid August. All right. That sounds and feels kind of significant there. So um, let me just go go back to though the S&P 500 I mentioned uh, remain kind of an even split, but you had 242 names in the S&P gaining ground today, 260 declining to unchanged. Absolutely. You take a look at the sectors, uh, on the screen here. Uh, the pie chart here. And I want to focus actually in on the two little pieces of green here because this is where all the activity was in healthcare and in consumer staples. Energy did get in on the action. Uh, some of this has to do with some positive comments. We got out of a couple of the health care companies, but this just reads defensive. And I know, Carol, you say, oh, well, you know, half the stocks in the S&P were in the green. But you know it's Dollar Tree, Dollar General and Kroger a Walmart and these types of names and a lot of the health care names you know read into that what you will write. It does feel kind of telling in terms of the trade and who did actually gain. I'm going to talk health care in just a moment, but I got to start with bending spoons. Uh, BSP is the ticker soaring? 41%, but at its high it was up 55% today after Berkshire Hathaway agreed to invest an additional 330 million in the Italian technology conglomerate. The investment bringing Berkshire stake in bending spoons to 4%, and that investment giving bending spoons more capital to pursue acquisitions. So, you know, I was always told that you don't try to bend the spoon, Carol, and that it's impossible to just focus on the truth. Is this a matrix reference? It is. Thank you. Okay. There is no spoon. We send you to Beverly Hills, and this is what happens. Like, you get kind of thoughtful and sensitive. I was in Century City, actually. Oh, okay. Okay, wait. Hold on. How much? How much did Berkshire invest in this? Uh, so they did, um, 300, uh, an additional 330 million. Okay. In the company, 4% in total. Okay, but keep in mind that they previously invested 600 million, uh, at their July. Still, this is just such peanuts for Berkshire, right? Their cash model is $360 billion. But that they're interested, I think is. Yes, I agree. All right. I'm glad that you agree. Uh, you mentioned remain health care, and I noticed health care and biotech names really outperforming today. I'm just going to call your attention to a couple of them. And that includes Merck, which is up about 3.8%, and Moderna, a gain of about 4.6%. This was top, uh, in some of the major indices, maybe because Merck CEO telling CNBC that he expects the company's breakthrough cancer vaccine with Moderna to get faster to make over time. He acknowledged that manufacturing the vaccine is a complex system. That said, Merck and Moderna have the process down to a very tight science. Keep in mind, investors very excited about the prospect for cancer vaccine. So, uh, and it could also be just kind of a safe play when you look at the rest of the health care sector, because a lot of names, biotech and other, uh, were higher in today's session. And then we talked about the tough going for those big banks, a lot of them under pressure over the last couple of days. We did see JPMorgan lower yesterday, but we saw investors moving back in stock up about 1.2% in today's session. So I just thought that was interesting. A little bit of a stand out. Uh, especially when it comes to the largest U.S. bank here. All right. That's my gainers. All right. I got to start for decliners with Bank of America. This shares of Bank of America down 4.8% today. They were down as much as 7% earlier in the session, at one point raising $30 billion in market cap before bouncing off those loves a little bit. The headline we got it late yesterday after the market closed $1.21 billion of fines received for issues with its money laundering and sanctions control, its biggest regulatory find in the past decade. Uh, Herman? Jan, we just had him on the program, Ramon. And he said, I asked how much of today's decline in Bank of America is about this fine versus the numbers. He said it's mostly about this fine rather than the numbers. Uh, earnings. Though crimped by the charge, traders missed estimates a bond portfolio surpassed $100 billion in paper losses. Also, I want to draw everyone's attention over to the SoCs, the Philadelphia Semiconductor Stock Exchange Index. Carol got this one on my radar today, down four points, 3%. Over the last six days, the Sox has a raised over $1 trillion in market cap. That's just wild. Um, it's a lot. Yeah. Pressure on global chips, uh, increased due to factors including increased competition with AI, rising financing requirements, and higher rates, according to, uh, the chief investment office over at UBS. And finally, core week, let's get on over to Core. We have just, uh, related to what's happening down 15% today fell as much as 17%. AI related stocks fell. The company provider, the company um bonds plunged to levels typically indicating distress. The company CEO said the drop in the firm's stock and bond prices is due to the market acting, quote, irrationally. It's down about 8% this year. Remain down 64% from those all time highs. The yield story was a big story today. On the back of that 8:30 a.m. CPI report, we saw a 16 basis point spike in the two year yield, 11 basis point spike in the ten year yield. But for those of you watching us on television, you can see that those numbers got retraced in a big way. Your two year yield ends the day up by about two basis points, and the rest of the curve is actually lower. But we should point out some of that appear to be a bit of a haven bid because of the concerns about what's going on in equities.