Top 10 News Items 6/15-6/19: Obama Unveils Sweeping Regulatory Reform; S&P Cuts Ratings on 22 US Banks; RIM Earnings Inline, But Guidance Soft

June 19, 2009 3:51 PM EDT

Here is a recap of the top news items from this week on Wall Street:

1. The Obama administration proposed sweeping regulatory reform this week, addressing directly one of the top reasons why the U.S. is still in a recession. Some highlights of the plan include: 1. require that all financial firms that pose a significant risk to the financial system at large are subjected to strong consolidated supervision and regulation 2. increase market discipline and transparency to make our markets strong enough to withstand system-wide stress and the potential failure of one or more large financial institutions 3. rebuild trust in our markets by creating the Consumer Financial Protection Agency to focus exclusively on protecting consumers in credit, savings, and payment markets. 4. provide the government with the tools needed to manage financial crises so it is not forced to choose between bailouts and financial collapse and 5. raise international regulatory standards and improve international coordination.

2. Standard & Poor's lowered its credit ratings and revised its outlooks on 22 U.S. banks, saying operating conditions for the industry will become less favorable than they were in the past, characterized by greater volatility in financial markets during credit cycles, and tighter regulatory supervision. Among several of the banks were: BB&T (NYSE: BBT), Capital One (NYSE: COF), Comerica (NYSE: CMA), Fifth Third (Nasdaq: FITB), KeyCorp (NYSE: KEY), US Bancorp (NYSE: USB) and Regions Financial (NYSE: RF).

3. Research In Motion Limited (Nasdaq: RIMM) issued its Q1 results this week, reporting EPS of $0.98 on sales of $3.42 billion. The EPS number came in 4 cents better than what analysts had been expecting. Looking ahead, Q2 EPS are expected to be in the range of $0.94-$1.03 and sales of $3.45-$3.7 billion, which compares to the Street estimate of $0.97 and $3.59 billion, respectively. Share of RIM fell about 4% on the news. Despite the sell-off, analysts are still mostly bullish on the stock.

4. Apple (Nasdaq: AAPL) released its iPhone 3G S this Friday, boosting shares about 2%. As usual, reports of "hundreds waiting in line for a new iPhone" were abundant.

5. Ag stocks tumbled this week as concerns from German potash supplier K+S, which sees very weak potash demand this year. Consequently, K+S lowered its potash demand estimates from about 6 million to 4-4.5 million tonnes, also suggesting that it has seen "severe price weakness and unsustainability for large quantity pricing". Potash (NYSE: POT) fell 20%, Mosaic (NYSE: MOS) fell 16%, Agrium (NYSE: AGU) was down 17% and CF (NYSE: CF) fell 10%.

6. Analysts at Goldman Sachs made some pretty interesting calls this week: added Microsoft (Nasdaq: MSFT), Qualcomm (Nasdaq: QCOM) and Sina (Nasdaq: SINA) to its Conviction Buy list. The firm also upgraded a dry bulk shipper, Frontline (NYSE: FRO) all the way from Sell to Conviction Buy. The firm also downgraded shares of Wal-Mart (NYSE: WMT) and started Target (NYSE: TGT) at Buy.

7. Best Buy (NYSE: BBY) shares slid 10% this week amid better-than-expected Q1 results and inline guidance. Best

8. FedEx (NYSE: FDX) earnings, which traders often view as a good indicator for transportation stocks, came in mixed. The company reported Q4 EPS of $0.64, 13 cents better than the analyst estimate of $0.51. Revenue for the quarter was $7.85 billion, versus the consensus of $8.32 billion. Shares sold off as the company gave soft Q1 guidance: sees Q1 EPS of $0.30-$0.45, versus the consensus of $0.68. Shares of FedEx finished the week about 10% lower.

9. Sirius XM Radio (Nasdaq: SIRI) was volatile this week as the market priced in news that the satellite provider hit the iPhone this week. Normal subscribers will need to pay an extra Internet option fee in order to gain access to the program on their iPhone.

10. Following the regulatory reform proposal, traders began speculating that the terms could have adverse effects on GE as one of the rules requires that any "systemically important" financial firm, ie. GE Capital, be regulated similarly for its parent company and all subsidaries. Friday, however, reports came out saying GE had confirmed that it is "committed to retaining GE Capital".

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• Goldman Sachs Conviction Buy List
• Standard & Poor's
• BB&T Capital Markets
• StreetInsider.com Top 10 News Items for the Week
• Barack Obama

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