Bank of America Corp, the largest U.S. bank, reported weaker-than-expected quarterly earnings on Monday, slashed its dividend and said it would seek to raise $10 billion in additional capital.
Bank of America, which announced its earnings two weeks early, said third-quarter profit dropped to $1.18 billion, or 15 cents a share, from $3.70 billion, or 82 cents a share, a year ago.
Analysts looked for earnings per share of 60 cents, excluding one-time items, according to Reuters Estimates.
Bank of America warned that credit quality continued to weaken during the quarter, and said the economy has moved to a "recessionary environment."
"I'm sure it's a surprise. It's another tile in the mosaic. Things are not good with financial companies. This reflects it. This has to be a disappointment," said Lou Brien, market strategist at DRW Trading in Chicago.
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