Top 10 News Item 8/8-8/12: Stocks Respond to US Credit-Rating Downgrade; Dow Swings 400+ Points Four Days This Week; Fed Gives Hope for QE3
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Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 3.2%
Revenue Growth %: +5.2%
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Here is a recap of the top news items from this week on Wall Street:
1. The US stock market felt the wrath of a credit rating downgrade this week. After both Moody's and Fitch affirmed the nation's top credit rating in past weeks, Standard & Poor's late Friday night of last week made the downgrade official. The firm's credit rating for the US now sits at AA+. S&P has a Negative outlook on the country, meaning the firm doesn't see the US retaining the AAA rating any time soon.
2. The Dow Jones plunged more than 630 points on Monday following the credit-rating downgrade. Insane volatility continued throughout the week. The VIX surged over the 40 level, but closed the week session at around 37. The Dow had a jaw-dropping four days in a row of 400+ up or down moves. The S&P fell to as low as 1,101 before rebounding and closing at 1,177.
3. Tuesday the Fed said it will keep Fed Funds rate "exceptionally low" at least through mid-2013. Members also suggested the Fed stands ready to provide additional easing measures if needed. Surprisingly, there were three dissenters. Some said the FOMC statement suggests QE3 is coming, making the August 26 Jackson Hole meeting that much more important.
4. Issues in Europe continue to impact U.S. markets. SocGen and other European banks were hit on rumors of a France credit downgrade and other more company specific credit issues. SocGen denied all market rumors. The craziness in Europe was capped off with France, Italy, Spain, and Belgium banning short selling. Late Friday, a source suggested the ban could spread to other nations in the Eurozone.
5. Cisco (Nasdaq: CSCO) shares, down a whopping 22 percent since the beginning of this year, surged a nearly 16 percent on Thursday of this week following solid quarterly earnings. The company reported Q4 EPS of $0.40, $0.02 better than the analyst estimate of $0.38. Revenue for the quarter came in at $11.2 billion versus the consensus estimate of $10.97 billion.
6. Amid the fear whirling across Wall Street this week, gold price soared. The metal marked several new all-time highs, pushing over $1,800 before pulling back as stocks rebounded from drastically oversold levels. At the close of the market Friday, Gold was trading around $1,740 per ounce.
7. Insiders at numerous corporations purchased the stocks of their companies hand over first this week. As noted at StreetInsider earlier this week, corporate-level execs dipped a toe in, either looking for value or attempting to show some confidence in this tumultuous market.
8. Bank of America (NYSE: BAC) had a wild weak of trading. Share plunged earlier on rumors the company would have to raise more capital, which was later denied by the comply. Later in the in the week CEO Brian Moynihan presented on a conference call hosted by Fairholme’s Bruce Berkowitz. The stock plunged 20 percent on Monday, gained nearly 17 percent on Tuesday, fell 11 percent Wednesday, and rose 7 percent Thursday. Shares closed Friday's session down just about 1 percent.
9. Crude oil fell as much as 12.6 percent this week as fear and headline risk gripped the stock market. As stocks began rebounding, oil rebounded, closing the week just over $85 per barrel.
10. On the economic data front: consumer confidence in August for plunged to the lowest level since 1980, retail sales for the month of July rose 0.5 percent and initial jobless claims pushed back below the 400,000 level to 395,000.
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1. The US stock market felt the wrath of a credit rating downgrade this week. After both Moody's and Fitch affirmed the nation's top credit rating in past weeks, Standard & Poor's late Friday night of last week made the downgrade official. The firm's credit rating for the US now sits at AA+. S&P has a Negative outlook on the country, meaning the firm doesn't see the US retaining the AAA rating any time soon.
2. The Dow Jones plunged more than 630 points on Monday following the credit-rating downgrade. Insane volatility continued throughout the week. The VIX surged over the 40 level, but closed the week session at around 37. The Dow had a jaw-dropping four days in a row of 400+ up or down moves. The S&P fell to as low as 1,101 before rebounding and closing at 1,177.
3. Tuesday the Fed said it will keep Fed Funds rate "exceptionally low" at least through mid-2013. Members also suggested the Fed stands ready to provide additional easing measures if needed. Surprisingly, there were three dissenters. Some said the FOMC statement suggests QE3 is coming, making the August 26 Jackson Hole meeting that much more important.
4. Issues in Europe continue to impact U.S. markets. SocGen and other European banks were hit on rumors of a France credit downgrade and other more company specific credit issues. SocGen denied all market rumors. The craziness in Europe was capped off with France, Italy, Spain, and Belgium banning short selling. Late Friday, a source suggested the ban could spread to other nations in the Eurozone.
5. Cisco (Nasdaq: CSCO) shares, down a whopping 22 percent since the beginning of this year, surged a nearly 16 percent on Thursday of this week following solid quarterly earnings. The company reported Q4 EPS of $0.40, $0.02 better than the analyst estimate of $0.38. Revenue for the quarter came in at $11.2 billion versus the consensus estimate of $10.97 billion.
6. Amid the fear whirling across Wall Street this week, gold price soared. The metal marked several new all-time highs, pushing over $1,800 before pulling back as stocks rebounded from drastically oversold levels. At the close of the market Friday, Gold was trading around $1,740 per ounce.
7. Insiders at numerous corporations purchased the stocks of their companies hand over first this week. As noted at StreetInsider earlier this week, corporate-level execs dipped a toe in, either looking for value or attempting to show some confidence in this tumultuous market.
8. Bank of America (NYSE: BAC) had a wild weak of trading. Share plunged earlier on rumors the company would have to raise more capital, which was later denied by the comply. Later in the in the week CEO Brian Moynihan presented on a conference call hosted by Fairholme’s Bruce Berkowitz. The stock plunged 20 percent on Monday, gained nearly 17 percent on Tuesday, fell 11 percent Wednesday, and rose 7 percent Thursday. Shares closed Friday's session down just about 1 percent.
9. Crude oil fell as much as 12.6 percent this week as fear and headline risk gripped the stock market. As stocks began rebounding, oil rebounded, closing the week just over $85 per barrel.
10. On the economic data front: consumer confidence in August for plunged to the lowest level since 1980, retail sales for the month of July rose 0.5 percent and initial jobless claims pushed back below the 400,000 level to 395,000.
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Initial Jobless Claims, Bank of America, Federal Open Market Committee, Standard & Poor's, Crude Oil, Earnings, Bruce Berkowitz
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