11 Stocks to Watch: Bank of America, Goldman

NEW YORK (TheStreet) -- Bank of America (BAC) reported a second-quarter loss of 90 cents a share, in line with analysts' expectations. During the same time last year, Bank of America reported profit of 27 cents a share.

Shares were down 0.8% to $9.64 in premarket trading Tuesday.

Goldman Sachs(GS) posted second-quarter profit $1.85 a share, below the consensus target of $2.27 a share but above last year's earnings of 78 cents a share.

Shares of the financial services firm were tumbling 3% to $125.50.

Tech bellwether IBM(IBM) earned $3.09 a share in the second quarter, up from $2.62 cents a share in the prior year's quarter, beating analysts' forecasts of $3.03 a share.

IBM shares were gaining 1.7% to $178.30.

Bank of New York Mellon(BK) reported second-quarter earnings of 59 cents a share, beatings analysts' estimates of 56 cents a share. The company reported earnings of 54 cents a share in the year-ago period.

Shares were advancing 1.1% to $24.90.

iPad maker Apple(AAPL) is expected to post third-quarter profit of $5.85 a share Tuesday after the markets close. The company reported $3.51 a share last year.

Shares were adding 1.1% to $377.94.

UnitedHealth(UNH) said Tuesday it earned $1.16 a share in the second quarter versus the average analyst estimate of 94 cents a share. UnitedHealth earned 99 cents a share a year earlier.

Revenue in the quarter rose to $25.23 billion vs. the consensus estimate of $25.24 billion and $23.26 billion a year earlier.

The managed care company raised its outlook for 2011.

Shares were down 0.9% to $51.50.

Wells Fargo(WFC) reported second-quarter profit of 70 cents a share Tuesday morning vs. the consensus estimate of 68 cents a share and last year's profit of 55 cents a share.

Shares were up 0.8% to $27.10.

Soda giant Coca-Cola(KO) reported second-quarter earnings of $1.17 versus the average analyst estimate of $1.16. Earnings per share were $1.06 a year ago.

Shares were rising 0.5% to $67.48.

Networking giant Cisco(CSCO) said it will cut 11,500 people, or 16% of its work force, through job cuts, buyouts and a manufacturing outsourcing deal with Foxconn.

Shares were up 0.5% at $15.51.

Consumer products giant Johnson & Johnson(JNJ) reported second-quarter profit of $1.28 a share Tuesday. The average analyst estimate was $1.24 a share. The company reported earnings of $1.21 a year ago.

J&J maintains its full-year earnings guidance at $4.90 to $5 a share.

Shares were up 0.2% to $67.20.

Internet company Yahoo!(YHOO) is expected to report second-quarter profit of 18 cents a share after the markets close Tuesday. During the same time last year, the company reported profit of 15 cents a share.

-- Written by Andrea Tse in New York.

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Bank of America Takes Another Mortgage Hit

NEW YORK (TheStreet) -- The bad news for Bank of America(BAC) is that mortgages cost the bank $20 billion in the second quarter.

The worse news is that management continues to struggle over the ultimate cost of its mortgage operations.

The mortgage-related costs were announced June 29, including a proposed $8.5 billion settlement with 22 institutions that bought mortgage backed securities (MBS) from Bank of America backed by mortgages that were fraudulent or otherwise didn't meet the underwriting criteria promised to the investors who bought the MBS. Bank of America CEO Brian Moynihan

With the agreement and other mortgage-related actions taken in the second quarter of 2011, the company believes it has recorded reserves in its financial statements for a substantial portion of its representations and warranties exposure as measured by original principal balance.

Bank of America recorded a loss of 90 cents for the second quarter, equal to Thomson Reuters consensus analyst estimates.

Even following an $8.5 billion settlement with a group of 22 institutions over mortgage backed securities and $12 billion in other mortgage-related charges, there appears to be a fair amount of uncertainty among investors and analysts about the extent of the bank's ongoing exposure.

What appears certain is that the bank is well behind rivals including Citigroup(C), Wells Fargo(WFC)and JPMorgan Chase(JPM) when it comes to reserving against higher capital requirements for globally systemically important financial institutions under international regulatory guidelines known as Basel III.

Still, Bank of America has said it expects to generate enough capital out of earnings to be able to meet the requirements, which, although they don't go into effect for several years, have in recent weeks been a keen area of focus for investors and analysts.

Bank of America CFO Bruce Thompson told analysts in a June 29 conference call the bank has set aside "the lion's share of what we can," for disputes with "monoline" bond insurers, such as Assured Guarantee Ltd.(AGO) and MBIA(MBI) as well as "private label" investors in its mortgage backed securities (MBS)--those other than government sponsored entities (GSEs) Fannie Mae (FNMA.OB)and Freddie Mac(FMCC.OB).

Bank of America also said the "range of possible loss" for non-GSE MBS claims is $5 billion.

While Bank of America has announced settlements with the GSEs, they are limited in scope. Also to be determined is the much-anticipated deal with a host of federal and state regulators over mortgage servicing. Some estimates have predicted a settlement of mortgage could cost Bank of America and other servicers as much as $25 billion, though many banking industry watchers, such as Sandler O'Neill analyst Jeff Harte, have said in the past that banks would be very unlikely to agree to such a large number.

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