Top 10 News Items: 1/19-1/23: European Banking Fears Spread to US; Microsoft Surprises the Street with a Miss; Merrill's Thain Spends a Million on His Office
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This is a recap of the top news items from this week on Wall Street:
1. Troubles within the financial sector began early this week when, on Monday, the UK government committed billions more in capital in order to stabilize it financial system. Adding to investor fears, the government of Ireland announced that it would need to nationalize its largest bank, Anglo Irish Bank Corp. Then, on Tuesday, Royal Bank of Scotland (NYSE: RBS) warned of a massive 2008 loss, sending forth a flurry of huge double-digit percentage declines among these European banks. Barclay's (NYSE: BCS) fell more than 57%, Allied Irish Bank (NYSE: AIB) tumbled 50% and Lloyds (NYSE: LYG) fell about 56%. Panic quickly spread across the Atlantic and soon the US banks were whipsawing from positive to negative territory. For example, shares of Citigroup (NYSE: C) fluctuated at least 10% in each of this week's 4 trading sessions, but the stock close relatively flat versus last week.
2. Microsoft (Nasdaq: MSFT) surprised the Street this week by announcing its Q2 earnings results several hours early. Instead of reporting Thursday after the close, the tech-bellweather released its report before the open, missing the Street's sales and EPS estimates, and also announcing that it won't be issuing guidance for the year. Shares opened Thursday's trading session down about 7%, but angry shareholders continued selling the stock all day and it closed down nearly 12%.
3. Merrill Lynch's former CEO, John Thain was oustered from Bank of America (NYSE: BAC) this weak in a "mutual" agreement between him and management. Given the circumstances, however, most traders believe that Thain was simply booted. The drama came to a climax Thursday when CNBC's Charlie Gasparino reported that Thain spent more than a million dollars of Merrill's money to remodel his office. Among some of the more surprising expenses: $800,000 for an interior designer and $35,000 for a commode on legs. Click here for the full report.
4. Shares of IBM (NYSE: IBM) had a great weak following better-than-expected Q4 earnings. The company topped Wall Street's EPS estimate by 25 cents and also issued FY09 guidance that was much better than the analyst consensus. IBM finished this week up 5.4%.
5. Despite earnings that beat the Street's expectations, shares of State Street (NYSE: STT) crumbled this week on weak guidance. Shares were slammed more than 59% on Tuesday, but regained some losses by the end of the week, closing around $19.40.
6. Google (Nasdaq: GOOG) snuffed out investor concerns this week following Q4 earnings reported Thursday that beat Street estimates. The world's largest search engine reported EPS for the quarter of $5.10, 15 cents over what the analysts were expecting.
7. Wyeth (NYSE: WYE) surged Friday on reports that it and Pfizer (NYSE: PFE) have been in talks related to a possible deal for some time now. Click here for the full report.
8. Apple (Nasdaq: AAPL) reported solid earnings this week, sending the stock 7% higher on Thursday. Apple's better-than-expected earnings were driven by strong iPod sales, which came in at more than 22 million during the quarter, with about 4.4 million iPhones being shipped, as well as Mac shipments of about 2.5 million.
9. Chrysler announced that it has been in talks with Fiat regarding a potential global alliance. According to the rumors, Fiat would get a 35% equity interest in Chrysler if a deal was hammered out. Friday, a Chrysler director issued statements saying that the mix-up was "not yet a done deal".
10. Executives at both Bank of America and JPMorgan (NYSE: JPM) showed conviction in their companies this week, disclosing purchases of common stock in the open market. Among some of the notables: BofA's Ken Lewis bought 200,000 shares and JPM's Jamie Dimon purchased 500,00 shares, spending more than $11 million on the investment.
Related Categories
Special ReportsStocks Mentioned
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+0.08Related Entities
- Charles Gasparino
- Chrysler LLC
- JPMorgan
- Citi
- Merrill Lynch
- Banc of America
- John A. Thain
- Jamie Dimon
- StreetInsider.com Top 10 News Items for the Week
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Microsoft
C. Coffey on Jan 25, 2009 02:51 AMMicrosoft's earnings shouldn't come as a surpise. I'm a senior technologist and can safely say the number of people I encounter who seriously criticise Vista, principally on performance and stability, heavily outweighs the number who praise it. To date, people I've found looking to use Linux have largely been people with technical backgrounds. This is now changing; those people I meet with Vista issues are looking for alternatives not just to Vista, but because of their poor experience, to Microsoft. Corporates are thinking the same way. No Microsoft OS means no Microsoft Applications or Middleware. My personal TCO for Microsoft Vista was --massive-- compared to the actual cost of product due to the obscene amount of time taken to install, troubleshoot and maintain the OS. Since installing Linux at home I'm spending my time where I need to - and it isn't in front of the PC. The teams where I work have an option to use Linux and the more adventurous have now replaced XP with Linux; there will be no upgrade path to Vista. OpenOffice replaces Office for most purposes and Java/OpenSource ensures that we can find/do anything we need. My view would be that Microsoft lost sight of it's technical underpinnings in it's race for a slice of the entertainment/multimedia world, and has probably walked it's core francise(s) into a cul-de-sac.