At first glance today, it seemed that the big banks were going to help lead the market higher ... that has since changed. The Dow is roughly 100 points lower, and what looked like a good day is slipping back into the volatile pattern of the past week. One of the stocks mimicking the Dow's pattern today is blue chipper Bank of America (BAC: sentiment, chart, options). This morning, Robert W. Baird upped BAC to "outperform" from "neutral," noting that the bank's long-term earnings power remains strong, and that the recent capital raise and dividend cut should help mitigate the need for future capital issuance. Earlier this week, BAC reported a steeper-than-expected 68% drop in quarterly profit, cut its current dividend in half, and released plans to raise $9.76 billion in cash. However, Baird believes that the "recent weakness in the stock was overdone, and has provided an attractive entry point."

The brokerage believes that BAC will "merge as a market-share winner through the cycle, and should continue to benefit from a 'flight to quality' in the retail deposit market given the challenges of many of its competitors." At first, BAC shares reacted positively to the upgrade, but they were pulled lower as the Dow dropped. Of course, with volatility the way it is, the Dow's triple-digit loss has nearly evaporated in the 5 minutes I have been typing ... so BAC is treading near breakeven. That said, expect the stock to fluctuate between positive and negative territory throughout the day ... not being wishy-washy, just realistic.