Top 10 News Items 9/2-9/5: Commodity Stocks Continue Slide; PIMCO's Gross Waits on the Sidelines; Unemployment Rate Jumps to 5-Yr High

September 5, 2008 3:15 PM EDT

This is a recap of this week's major news on Wall Street.

1. Commodity stocks continued to move sharply lower this week. Traders remain concerned with the potential for a global slowdown and the implications that this could have on supply and demand for the commodities group. Adding to the downside, reports on Tuesday that Ospraie, a very large commodities hedge fund, would be closing its main fund sent rumors swirling all around Wall Street as to which hedge fund would be next to close.

2. Appearing on CNBC, PIMCO's Bill Gross said that he is currently waiting on the sidelines and will not be buying debt in Wells Fargo (NYSE: WFC) and other banks. Gross suggested that the Treasury may need to step in with Hank Paulson's "bazooka", and hinted that he may become more constructive if this occured.

3. Friday the unemployment rate jumped to 6.1%, its highest level in 5 years.

4. As traders began making their ways back into the market after the Labor day weekend, buyout rumors were heard around the Street regarding several large companies. First, SanDisk (Nasdaq: SNDK) is supposedly talking with Samsung about a possible acquisition. SanDisk responded, saying "SanDisk periodically has conversations with multiple parties, including Samsung, regarding a variety of potential business opportunities. We evaluate all of these opportunities, but maintain a policy of not commenting on market rumors or speculation." Secondly, reports out of the NY Times speculated that Altria (NYSE: MO) is in advanced talks with UST (NYSE: UST) about a possible buyout.

5. Shares of Regions Financial (NYSE: RF) saw upside this week on news that the company assumed from the FDIC approximately $900 million in total deposits, including all uninsured deposits, from Integrity Bank.

6. News out of the mobile handset market sent shares of Nokia (NYSE: NOK) and Qualcomm (Nasdaq: QCOM) tumbling. Nokia lowered its Q3 mobile device market share estimate to lower than Q2, which compares to its prior estimate of flat from Q3 to Q2. The stock slide more than 7% on Friday. Earlier in the week, Qualcomm's CEO, Paul Jacobs, told CNBC viewers that the company is seeing some signs that customers are upgrading their cell phones at a slower pace. Furthermore, Goldman Sachs removed the stock from its Conviction Buy List on Wednesday.

7. Ciena (Nasdaq: CIEN) issued an earnings warning on Thursday. The company reported Q3 EPS of $0.37, ex-items, in-line with estimates. Revenues came in at $253.2 million, versus the consensus of $253.7 million. Sees Q4 revenues $190-$210 million, versus the consensus of $263 million. The stock fell from about $17.50 on Wednesday to about $13 on Thursday, sending a chill through the entire tech sector.

8. On Tuesday, Corning (NYSE: GLW) lowered its Q3 guidance for EPS before special items to $0.43-$0.45, down from the previous guidance of $0.48-$0.51 and the consensus of $0.50. Corning said sales are now expected to be in the range of $1.58-$1.62 billion versus previously disclosed guidance of $1.65-$1.72 billion and the consensus of $1.7 billion. The company also revised its Q3 gross margin expectation from at least 50% to about 47%.

9. Retail sales for the month of August were released on Thursday. Amid mostly disappointing results, the world's largest retailer, Wal-Mart (NYSE: WMT) posted a 3% increase in its same store sales.

10. Google (Nasdaq: GOOG) surprised the Internet world by releasing its own web browser this week. Named the "Chrome", the browser is still in beta, but is already getting rave reviews across Wall Street and Main Street alike.

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Related Entities

• Goldman Sachs Conviction Buy List
• Goldman Sachs
• William H. Gross
• Pacific Investment Management Company, LLC (PIMCO)
• Henry Paulson
• Hedge Funds

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