Market Wrap: Kodak Skips Chapters 1-10, Goes for 11; Markets Hit Half-Year High; AMR Misses Pension Payment...Mostly


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January 19, 2012 6:22 PM EST Send to a Friend
Market wrap-up for January 19th

End of the Day: Dow Jones up 46.2 to 12,625.19; Nasdaq up 18.6 to 2,788.33; S&P 500 up 6.5 to 1,314.50.

The following is a brief summary of events moving markets today:
  • Why don't you take a picture? It'll last longer!: Late Wednesday, Eastman Kodak Company (NYSE: EK) officially filed voluntary petitions for Chapter 11 bankruptcy reorganization. According to the release: "The business reorganization is intended to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable the Company to focus on its most valuable business lines. The Company has made pioneering investments in digital and materials deposition technologies in recent years, generating approximately 75% of its revenue from digital businesses in 2011."

    The filing comes after some speculation in the preceding weeks that the event might happen. Kodak also secured $950 million of debtor-in-possession financing from Citigroup (NYSE: C). For more color, click here.

  • E&E (Earnings and Europe) lead markets higher: U.S. stocks finished at a six-month high, with the final push coming toward the end of the session. Earnings from Bank of America (NYSE: BAC), Morgan Stanley (NYSE: MS), and F5 Networks (Nasdaq: FFIV) earlier in the session helped start the move, and generally successful debt offerings in France and Spain -- which produced lower yields -- also helped sentiment.

  • Did anyone expect otherwise?: AMR Corp. (NYSE: AMR), parent of American Airlines, made only a small portion of a $100 million payment it was supposed to make towards its pension. How small, you ask? Only about $6.5 million was transferred from AMR to the plan, or 6.5 percent of the total expected.

    The deposit was made to the displeasure of the Pension Benefit Guaranty Corp. (PBGC), which will inherit the liability should AMR not be able to keep up with payments. Raise your hand if you know where the PBGC gets funds to takeover such a burden.

    Nope, not taxpayers, as you might initially suspect. According to the website: "PBGC collects insurance premiums from employers that sponsor insured pension plans, earns money from investments and receives funds from pension plans it takes over."

  • Fourth-quarter solid...for most: After the market closed, four companies with about $800 billion in combined market cap reported fourth-quarter results. While Microsoft (Nasdaq: MSFT), IBM (NYSE: IBM), and Intel (Nasdaq: INTC) posted a beat, Google (Nasdaq: GOOG) failed to meet expectations. To get more information on all of the earnings today, click here.

  • Apple's really do make you smarter!: Apple (Nasdaq: AAPL) may shift the paradigm in education with the introduction of iBooks 2 for its iPad tablet device. The media and tech giant has partnered with publishers like Houghton Mifflin Harcourt, McGraw-Hill (NYSE: MHP) and Pearson (NYSE: PSO) to create textbooks for $14.99 or less. For more color on the initiative, click here.
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