Top 10 News Items 2/8-2/12: EU Agrees to Support Greece; China Raises Reserve Requirements for 2nd Time; Earnings Season Winding Down
Here is a recap of the top news items from this week on Wall Street:
1. Following several days of rumors related to the possible bailout of the country, the EU finally agreed to a deal to support Greece. The real story, however, is that the organization is providing no details related to the deal and just provided statements of moral support for the debt-ridden country at this point.
2. The central bank in China said Friday that it is raising the share of deposits that banks are required to keep in reserve -- for the second time in a year -- in an effort to temper the rapid growth in credit to avoid potential inflation and asset bubbles. According to the People's Bank of China the reserve-requirement ratio for banks will be hiked by half of a percentage point starting February 25, marking the second increase this year. The standard for what major banks will be 16.5 percent of deposits kept on reserve.
3. Earnings season is juuust about over with this week. Some highlights from this week include Coke (NYSE: KO), Pepsi (NYSE: PEP), McDonald's (NYSE: MCD) and Disney (NYSE: DIS).
4. The U.S. trade deficit grew by a larger-than-expected margin in December to $40.18 billion, the highest level since the same month in the prior year, as the recovering economy ramps up demand for imports. The Commerce Department said on Wednesday that the imbalance for December grew by 10.4 percent from the November deficit. Economists had expected an imbalance of $36 billion. Imports grew by 4.8 percent in the last month of 2009 to $182.88 billion, bolstered by the biggest increase in oil imports since October 2008 at 14.8 percent.
5. Baidu (Nasdaq: BIDU) reported blow-out quarterly earnings for the second quarter in a row this week. Q4 EPS came in at $1.88, a whole 20 cents better than where the Street had been looking for, on sales of $184.7 million. The company also guided sales above the Street: $176-$181 million, versus the analyst estimate of $170.23 million. Shares surged nearly 11% following the results.
6. The gaming industry had a tumultuous week as Electronic Arts (Nasdaq: ERTS) reported soft earnings while its rival, Activision Blizzard (Nasdaq: ATVI), reported solid quarterly results. Shares of Electronic Arts fell about 9% after the earnings. Activision shares rose about 10% to close the week.
7. CME Group (NYSE: CME) announced a deal with Dow Jones & Company to take 90 percent ownership interest and Dow Jones will take a 10 percent ownership interest in a new joint venture that will own the Dow Jones Indexes, which includes The Dow Jones Industrial Average and approximately 130,000 index properties. Shares of CME rose more than 5% on Thursday and Friday to close this week's trading.
8. Despite a Congressional hearing being canceled due to snow, Fed Chairman Ben Bernanke issued his prepared testimony on the Federal Reserve's exit strategy. Mr. Bernanke said while the economy continues to require the support of accommodative monetary policies, the Federal Reserve is confident that they have the right tools to reverse the currently very high degree of monetary stimulus. Some of those tools include increasing the interest rates on bank reserves, reverse repos, term deposits and selling securities. In the speech, Mr. Bernanke explained that the Fed's approach to the financial crisis can broadly be lumped into two parts - 1. Liquidity Programs, 2. Monetary Policy and Asset Purchases. View the full report for more details.
9. Early in the week, CIT (NYSE: CIT) shareholders were introduced to a new CEO: none other than the crafty John Thain, former exec at both the NYSE (NYSE: NYX) and Merrill Lynch. Shareholders seem to be mixed on the news: the stock was volatile over the majority of this weeks session.
10. Traders booed earnings at Sprint (NYSE: S) this week, selling the stock each day after it reported results. The stock tumbled 8% on Wednesday, and 3% on both Thursday and Friday.
1. Following several days of rumors related to the possible bailout of the country, the EU finally agreed to a deal to support Greece. The real story, however, is that the organization is providing no details related to the deal and just provided statements of moral support for the debt-ridden country at this point.
2. The central bank in China said Friday that it is raising the share of deposits that banks are required to keep in reserve -- for the second time in a year -- in an effort to temper the rapid growth in credit to avoid potential inflation and asset bubbles. According to the People's Bank of China the reserve-requirement ratio for banks will be hiked by half of a percentage point starting February 25, marking the second increase this year. The standard for what major banks will be 16.5 percent of deposits kept on reserve.
3. Earnings season is juuust about over with this week. Some highlights from this week include Coke (NYSE: KO), Pepsi (NYSE: PEP), McDonald's (NYSE: MCD) and Disney (NYSE: DIS).
4. The U.S. trade deficit grew by a larger-than-expected margin in December to $40.18 billion, the highest level since the same month in the prior year, as the recovering economy ramps up demand for imports. The Commerce Department said on Wednesday that the imbalance for December grew by 10.4 percent from the November deficit. Economists had expected an imbalance of $36 billion. Imports grew by 4.8 percent in the last month of 2009 to $182.88 billion, bolstered by the biggest increase in oil imports since October 2008 at 14.8 percent.
5. Baidu (Nasdaq: BIDU) reported blow-out quarterly earnings for the second quarter in a row this week. Q4 EPS came in at $1.88, a whole 20 cents better than where the Street had been looking for, on sales of $184.7 million. The company also guided sales above the Street: $176-$181 million, versus the analyst estimate of $170.23 million. Shares surged nearly 11% following the results.
6. The gaming industry had a tumultuous week as Electronic Arts (Nasdaq: ERTS) reported soft earnings while its rival, Activision Blizzard (Nasdaq: ATVI), reported solid quarterly results. Shares of Electronic Arts fell about 9% after the earnings. Activision shares rose about 10% to close the week.
7. CME Group (NYSE: CME) announced a deal with Dow Jones & Company to take 90 percent ownership interest and Dow Jones will take a 10 percent ownership interest in a new joint venture that will own the Dow Jones Indexes, which includes The Dow Jones Industrial Average and approximately 130,000 index properties. Shares of CME rose more than 5% on Thursday and Friday to close this week's trading.
8. Despite a Congressional hearing being canceled due to snow, Fed Chairman Ben Bernanke issued his prepared testimony on the Federal Reserve's exit strategy. Mr. Bernanke said while the economy continues to require the support of accommodative monetary policies, the Federal Reserve is confident that they have the right tools to reverse the currently very high degree of monetary stimulus. Some of those tools include increasing the interest rates on bank reserves, reverse repos, term deposits and selling securities. In the speech, Mr. Bernanke explained that the Fed's approach to the financial crisis can broadly be lumped into two parts - 1. Liquidity Programs, 2. Monetary Policy and Asset Purchases. View the full report for more details.
9. Early in the week, CIT (NYSE: CIT) shareholders were introduced to a new CEO: none other than the crafty John Thain, former exec at both the NYSE (NYSE: NYX) and Merrill Lynch. Shareholders seem to be mixed on the news: the stock was volatile over the majority of this weeks session.
10. Traders booed earnings at Sprint (NYSE: S) this week, selling the stock each day after it reported results. The stock tumbled 8% on Wednesday, and 3% on both Thursday and Friday.
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