Top 10 News Items 11/10-11/14: Fed Announces New AIG Bailout, Gov't Abandons Buying Troubled Assets, China Plans $586B Stimulus Package

November 14, 2008 4:39 PM EST

This is a recap of the top 10 news items for the last week on Wall Street:

1. The week started off with the announcement that The Federal Reserve Board and the U.S. Treasury had restructured AIG's (NYSE: AIG) original bailout package "in order to keep the company strong and facilitate its ability to complete its restructuring process successfully." Besides an interest rate reduction on its credit facility, AIG's access to capital increase from the original $85 billion to $152.5 billion. Shares of AIG surged 8% on Monday, but by the end of the week, had traded down to relatively the same level as last Friday's close.

2. Late Wednesday morning, Treasury Secretary Hank Paulson confirmed that they have abandoned the original plan of the $700 billion bailout approved by Congress, which was to buy troubled assets, and instead focused on direct purchases of equity in banks. Paulson said that during the two weeks that Congress considered the legislation, market conditions worsened considerably and it became clear to him that purchasing troubled assets would take too much time to implement and would not be sufficient given the severity of the problem.

3. Worldwide markets rallied Monday, following news that China had approved a $586 billion economic stimulus package. The news soothed material and commodities concerns, sending energy stocks surging. Despite gains around the world, US markets sold-off; the Dow declined more than 100 points.

4. After the close on Wednesday, Intel (Nasdaq: INTC) cut its Q4 guidance, sending stocks reeling in after-hours trading. Intel now sees Q4 revenue to be $9 billion, plus or minus $300 million, lower than the previous expectation of between $10.1 billion and $10.9 billion. The Wall Street consensus is $10.36 billion. Intel cited "significantly weaker than expected demand in all geographies and market segments." Thursday morning, stocks began tumbling, lead lower by the Intel news, but mid-day buys came in and the Dow marked an 800 point rally. Intel closed up nearly 7% despite the slashed guidance.

5. Before the market opened Wednesday, Best Buy (NYSE: BBY) also announced a reduction in guidance. Best Buy now sees FY09 EPS guidance from $3.25-$3.40 to $2.30-$2.90, versus the Street estimate of $3.04. Shares of Best Buy tumbled more than 8% on the news.

6. Although investors were certainly expecting bad retail numbers, the results still looked gruesome. Retail sales fell 2.8%, compared to the Street estimate of down 2.1%. Numerous retailers cut guidance: Wal-Mart (NYSE: WMT), JCPenney (NYSE: JCP), Kohl's (NYSE: KSS), Nordstroms (NYSE: JWN), Abercrombie and Fitch (NYSE: ANF), Christopher & Banks (NYSE: CBK) and Perry Ellis (Nasdaq: PERY).

7. Initial jobless claims came in at 516,000, compared to the Street estimate of 480,000.

8. Monday, Circuit City (NYSE: CC) announced that it had filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia in Richmond, Va. The company plans to continue operating the business without interruption as management focuses on developing and executing a comprehensive corporate restructuring plan.

9. McDonald's (NYSE: MCD) announced its October same store sales rose 8.2%, proving that at least someone is making money, or even just not losing money, in this environment. Shares of McDonald's closed this week's trading session up a little more than 1%.

10. Thursday, GE (NYSE: GE) reiterated its previous statement made on Sept. 25 that it would continue paying its current dividend through 2009. Just after the news hit, purchases made by GE's CEO Jeff Immelt and Vice Chairman Michael Neal were disclosed. The two execs bought 100,000 shares together.

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• Initial Jobless Claims
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• Dividend
• StreetInsider.com Top 10 News Items for the Week
• Bankruptcy

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