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Market Wrap-Up for Aug.25 (BAC, WFC, C, JPM, AAPL, AMAT, more)

We saw a spike in shares of Bank of America ( BAC ) this morning, on news that Warren Buffett's Berkshire Hathaway ( BRK-A ) firm will invest $5 billion in the company. The stock did close way off the early highs by the close.

It's pretty amazing to see this deal happen, considering Bank of America's management had told investors for months that the company was well-capitalized and didn't need any help. The exact terms of the deal are still being worked out, but it's safe to say Warren Buffett wouldn't be pulling the trigger on the investment unless the risk/reward was totally in his favor. Early word is Mr. Buffett will be receiving a 6% dividend on his money, and he likely has some sort of downside protection in place as well. The early pop in the stock did provide a glimmer of relief to hedge funds who have been crushed in buying those shares all the way down (BAC stock has plummeted more than 42% year-to-date). Also, don't forget Mr. Buffett had met with President Obama earlier in the week, so the subject of helping out the banks could have spurred this Buffett "bailout." Donald Trump's endorsement of BAC shares a few weeks back didn't help investors' excitement. Bank of America's management is clearly hoping Mr. Buffett's bet can do better.

As for the rest of the markets, the early rally we saw in the averages couldn't hold up, erasing he early gains in other financial names such as J.P. Morgan ( JPM ), Citigroup ( C ), and Wells Fargo ( WFC ), which had gotten a bit of a rub from the Buffett/BAC news. Elsewhere, earnings results were not too well-received by investors this morning for shares of Applied Materials ( AMAT ), Hormel Foods ( HRL ), and Guess Inc. ( GES ).

We removed another two names from our "Recommended" list today, so be sure to check out our article detailing these downgrades if you haven't already.

The other key story we're watching closely is the suddenly tumbling gold price action. The rumors of margin increases coming for the yellow metal was confirmed after hours (pretty coincidental it happened following the biggest one-day percentage drop in gold prices since March 2008. I wonder if the SEC will take a closer look at any unusual trading from yesterday.). Remember, tomorrow is the highly-anticipated Jackson Hole speech in which Federal Reserve chairman Ben Bernanke may hint at further aid for the economy. On the flipside, gold traders will certainly get very nervous if the chairman indicates the federal government's seemingly endless money printing is coming to an end.

It was sad to hear about Steve Jobs resigning as CEO of Apple ( AAPL ) esterday. The man has been behind some of the greatest technological innovations we are using today. I've studied Jobs' career, and all indicators are he was tough as nails when it came to execution, and would not deal well with mediocrity. I'm sure we can all think back i our own lives to people who've been tough on us, and realize that extra motivation is what allowed us to excel. Sometimes when I write my newsletter, I feel I'm being a bit tough with how I express the reality of what is happening in the economy and the markets. This tendency stems from the stories I hear on a daily basis from Dividend.com readers, friends, and family, who've expressed their own financial difficulties to me. I often get the sense that somewhere along the line, no one checked them on their actions that led to financial pain. That's where my sense of "tough love" comes from, and I refuse to back off when it comes to keeping everyone abreast of any impending dangers in the markets and the economy.

Always keep in mind that dividend investing does not require a special talent, education level, years of experience, luck, or much money either. It simply requires a commitment from you as an investor that you will keep putting money to work consistently in the best ideas available (that would be from our Best Dividend Stocks List ). That's really all it takes! The material you find on our Dividend.com site and some great stuff you will read in my Be a Dividend Millionaire book will help you get to where you want to be financially.

Thanks for reading everybody. I'll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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