Bank Of America Tumbles

Bank of America (BAC) announced that it would halt plans to buy back its stock and would not increase its dividend. The change was because BAC found an accounting mistake that reduced its capital by $4 billion. Because of banking regulations, BAC has to receive approval from the Fed to increase dividends or repurchase stock. In a previous attempt to increase dividends, the Fed miscalculated BAC's capital. As you would expect, the news affected the stock price, with a drop of over 6 percent on the day.