BofA's $1.2 Billion Fine Wipes Out Earnings Gains, Profit Falls 17%

Bank of America reported a 17% drop in third-quarter profit after absorbing a $1.2 billion government fine tied to money laundering, the Financial Times reported. The bank also missed on trading and investment banking performance, and its shares fell in the session that followed. Morgan Stanley told a different story on the surface: profit rose on equity trading strength, and the bank beat earnings estimates by $0.09 a share while topping revenue forecasts. But its stock slipped anyway, suggesting investors found something in the details — guidance, expenses or another line item — that offset the headline beat. State Street added a third variation. The bank beat on earnings but missed on revenue, and its shares fell 4% in response. Taken together, the three results show a banking sector where beating profit expectations is no longer enough to move stocks higher; investors are parsing revenue quality and one-off costs more closely than the headline numbers.