Top 10 News Items: Euro Stress Tests Completed, Apple Reports Blow-Out Results, Financial Earnings Look Mostly Inline
Here is a recap of the top news items from this week on Wall Street:
1. While stocks were not exactly responsive to results from the European bank stress tests, the news had broad implications and gave the next indication of where worldwide markets could be headed. Of 91 European banks, seven have failed stress tests that were conducted to measure how strong the institutions would be if the debt crisis in the region worsens sharply. As was widely expected, Germany’s Hypo Real Estate Holding AG failed the test, while five unlisted Spanish savings banks also failed to meet the requirements to pass, including Diada, Unnim, Espiga, Banca Civica, and Cajasur. Greece’s ATE bank failed as well, and confirmed that it would move forward with exercises to raise capital.
2. Apple (Nasdaq: AAPL) reported blow-out Q2 earnings on Tuesday night of this week, sending shares about 5.5% higher by Friday's close. EPS came in at $3.51, topping the Street estimate of $3.10 handily, with sales at $15.7 billion. Guidance, as usual, was "conservative", however, traders shrugged the outlook off. Q4 EPS are expected to be about $3.44 while sales are expected to be about $18 billion.
3. Elsewhere on the earnings front, specifically in the Financial group: Goldman's (NYSE: GS) profit fell sharply but beat the Street and Wells Fargo (NYSE: WFC), Morgan Stanley (NYSE: MS) and the credit-card processor AmEx (NYSE: AXP) also reported. The XLF (NYSE: XLF) rose more than 3% this week.
4. Fed Chairman Ben Bernanke sent markets into a nosedive on Wednesday as his testimony to the Senate Banking Committee on the Semiannual Monetary Policy Report was released mid-day. Among other notable comments, Bernanke called the current market outlook "unusually uncertain" and also said that the Fed would be prepared to take more policy actions "as needed."
5. In the Tech sector: IBM (NYSE: IBM), Texas Instruments (NYSE: TXN), Seagate (NYSE: STX), Juniper (Nasdaq: JNPR), Yahoo! (Nasdaq: YHOO), VMware (NYSE: VMW), Apple (Nasdaq: AAPL), QUALCOMM (Nasdaq: QCOM), eBay (Nasdaq: EBAY), Baidu (Nasdaq: BIDU), Amazon (Nasdaq: AMZN), SanDisk (Nasdaq: SNDK) and Microsoft (Nasdaq: MSFT) also reported.
6. Shares of Genzyme (Nasdaq: GENZ) surged more than 20% amid news that Sanofi Aventis (NYSE: SNY) could be interested in bidding for the company. It seems the market action created the first somewhat-successful circuitbreaker trigger.
7. Earnings also came in from Pepsi (NYSE: PEP), Coke (NYSE: KO), J&J (NYSE: JNJ), MO), 3M (NYSE: MMM), Caterpillar (NYSE: CAT), Ford (NYSE: F), UPS (NYSE: UPS), Honeywell (NYSE: HON), Kimberly Clark (NYSE: KMB) and McDonald's (NYSE: MCD).
8. General Electric (NYSE: GE) boosted its quarterly dividend by 20% on Friday, bringing the rate to $0.12 per quarter. The news should be viewed as yet another "green shoot" that the market recovery is holding momentum.
9. Two top wireless providers issued quarterly earnings this week, AT&T (NYSE: T) and Verizon (NYSE: VZ). AT&T issued a "beat and raise" quarter while Verzion results were also solid.
10. Existing home sales for the month of June came in at 5.37 million, versus the economist estimate of 5.1 million, down 5.1% month-over-month. The XHB (NYSE: XHB) rose more than 8% this week.
1. While stocks were not exactly responsive to results from the European bank stress tests, the news had broad implications and gave the next indication of where worldwide markets could be headed. Of 91 European banks, seven have failed stress tests that were conducted to measure how strong the institutions would be if the debt crisis in the region worsens sharply. As was widely expected, Germany’s Hypo Real Estate Holding AG failed the test, while five unlisted Spanish savings banks also failed to meet the requirements to pass, including Diada, Unnim, Espiga, Banca Civica, and Cajasur. Greece’s ATE bank failed as well, and confirmed that it would move forward with exercises to raise capital.
2. Apple (Nasdaq: AAPL) reported blow-out Q2 earnings on Tuesday night of this week, sending shares about 5.5% higher by Friday's close. EPS came in at $3.51, topping the Street estimate of $3.10 handily, with sales at $15.7 billion. Guidance, as usual, was "conservative", however, traders shrugged the outlook off. Q4 EPS are expected to be about $3.44 while sales are expected to be about $18 billion.
3. Elsewhere on the earnings front, specifically in the Financial group: Goldman's (NYSE: GS) profit fell sharply but beat the Street and Wells Fargo (NYSE: WFC), Morgan Stanley (NYSE: MS) and the credit-card processor AmEx (NYSE: AXP) also reported. The XLF (NYSE: XLF) rose more than 3% this week.
4. Fed Chairman Ben Bernanke sent markets into a nosedive on Wednesday as his testimony to the Senate Banking Committee on the Semiannual Monetary Policy Report was released mid-day. Among other notable comments, Bernanke called the current market outlook "unusually uncertain" and also said that the Fed would be prepared to take more policy actions "as needed."
5. In the Tech sector: IBM (NYSE: IBM), Texas Instruments (NYSE: TXN), Seagate (NYSE: STX), Juniper (Nasdaq: JNPR), Yahoo! (Nasdaq: YHOO), VMware (NYSE: VMW), Apple (Nasdaq: AAPL), QUALCOMM (Nasdaq: QCOM), eBay (Nasdaq: EBAY), Baidu (Nasdaq: BIDU), Amazon (Nasdaq: AMZN), SanDisk (Nasdaq: SNDK) and Microsoft (Nasdaq: MSFT) also reported.
6. Shares of Genzyme (Nasdaq: GENZ) surged more than 20% amid news that Sanofi Aventis (NYSE: SNY) could be interested in bidding for the company. It seems the market action created the first somewhat-successful circuitbreaker trigger.
7. Earnings also came in from Pepsi (NYSE: PEP), Coke (NYSE: KO), J&J (NYSE: JNJ), MO), 3M (NYSE: MMM), Caterpillar (NYSE: CAT), Ford (NYSE: F), UPS (NYSE: UPS), Honeywell (NYSE: HON), Kimberly Clark (NYSE: KMB) and McDonald's (NYSE: MCD).
8. General Electric (NYSE: GE) boosted its quarterly dividend by 20% on Friday, bringing the rate to $0.12 per quarter. The news should be viewed as yet another "green shoot" that the market recovery is holding momentum.
9. Two top wireless providers issued quarterly earnings this week, AT&T (NYSE: T) and Verizon (NYSE: VZ). AT&T issued a "beat and raise" quarter while Verzion results were also solid.
10. Existing home sales for the month of June came in at 5.37 million, versus the economist estimate of 5.1 million, down 5.1% month-over-month. The XHB (NYSE: XHB) rose more than 8% this week.
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