Mixed Stock Markets Leave NIO Charging Up, B of A Powering Down

The stock market has seen some volatility in recent weeks, with early September's correction giving way to a big bullish bounce in October. Investors have gotten more optimistic than ever about the prospects for the U.S. economy and for corporate earnings, which are starting to come up for the third quarter this week. After having traded on both sides of the unchanged mark Wednesday morning, most major benchmarks pushed into positive territory by mid-morning. As of shortly before 11 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI) was up 35 points to 28,715. The S&P 500 (SNPINDEX: ^GSPC) inched higher by 3 points to 3,515, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 8 points to 11,873.

Electric vehicles have been a hot area for investors to focus on lately, and this morning, NIO (NYSE: NIO) once again captured headlines with some positive comments from analysts. Meanwhile, on the earnings front, big banks continued to give their results. Bank of America (NYSE: BAC) was the latest to report, and investors weren't entirely happy with what they saw.

NIO drives higher

Shares of NIO jumped 17%, adding to its impressive recent performance. The stock is up more than 40% just since late September.

Blue NIO EC6 vehicle parked on side of road in front of green building with a tree in front.

Image source: NIO.

The latest move higher for NIO came because of an extremely bullish note that analysts at J.P. Morgan shared. J.P. Morgan boosted its rating on the stock from neutral to overweight and dramatically upgraded its price target. The new target of $40 per share is $26 higher than its previous view.

The analysts focused on the fact that NIO's home market in China is poised for dramatic growth. In particular, J.P. Morgan sees electric vehicles getting a lot more market share among total vehicles in China, and NIO has a great opportunity to get more of its premium SUVs onto the market as electric vehicles get more popular.

Many have focused their attention on Tesla (NASDAQ: TSLA) as the obvious first-mover in the electric-vehicle space. But others believe that upstarts like NIO have a better shot at long-term gains. With NIO having home-field advantage in China, those looking to invest in electric automakers should at least consider NIO as an alternative -- or supplement -- to Tesla.

Investors give B of A an F

Elsewhere, bank earnings continued to come in, and Bank of America didn't fare well. The stock was down almost 4% Wednesday morning after the big bank released its third-quarter results.

Just a quick look at the news release makes it clear why some shareholders aren't happy. Revenue was down 11% on a 17% drop in net interest income. Lower consumer fees pushed noninterest income 4% lower year over year. Earnings declined considerably from year-ago levels.

Yet B of A is still doing a lot of things right. Deposits soared by 23% to $1.7 trillion, reflecting the extent to which millions of Americans are being extremely cautious with their money right now. B of A's capital strength also improved, with its common equity Tier 1 ratio climbing by half a percentage point to 11.9%.

B of A is also having success on the investment side of its business. Fees from investment banking relationships jumped 15% year over year. The bank's global wealth and investment management division saw record client balances of $3.1 trillion.

With high-growth tech stocks capturing investor attention, it's been hard for B of A and other bank stocks to get much love lately. It'll probably take a full-blown economic recovery to reverse that trend, but with B of A trading well below book value, some value investors continue to salivate over its prospects.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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