Top 10 News Items: Job Creation Falls Short, BofA Settles With GSEs on Mortgage Putbacks, Gold Slammed
Down)
1. The U.S. economy created fewer jobs than anticipated in December, which signals that the Federal Reserve will continue with plans to buy more assets. The Labor Department reported Friday that nonfarm payrolls increase 103,000, missing the economist estimate of 150,000. The unemployment rate did surprisingly dip to 9.4 percent, which was lower than the expected 9.7 percent. The overall employment for October and November was revised to show 70,000 more jobs added than previously reported.
2. On Monday Bank of America (NYSE: BAC) jumped higher after the company announced settlements with the GSEs over mortgage repurchase claims related to Countrywide --- something that has been a key overhang on the stock for some time. Bank of America is making a $1.28 billion cash payment to Freddie Mac that covers all outstanding loans and is making $1.34 billion cash payment to Fannie Mae that covers about 90% of outstanding loans.
3. Gold, which has been on a tear over the past few years, fell sharply this week. Illustrating the pressure in the precious metal, ETF SPDR Gold Shares (NYSE: GLD) fell 3.7% this week.
4. Qualcomm Incorporated (Nasdaq: QCOM) and Atheros Communications, Inc. (Nasdaq: ATHR) announced that they have entered into an agreement whereby Qualcomm will acquire all outstanding shares of Atheros for $45 per share, or a total consideration of $3.1 billion.
5. Goldman Sachs (NYSE: GS) is making a nearly $500 million investment in Facebook, valuing the social media juggernaut at $50 billion. In a rare move, Goldman is creating a "special purpose vehicle" to allow its high-net-worth clients to invest in Facebook, and demand has been red hot for a piece of the pre-IPO action.
6. Target (NYSE: TGT) shares fell on Thursday after reporting December comparable-store sales of up 0.9 percent, well below the consensus of up 3.9 percent. "December sales were below expectations, as strength in Grocery and Apparel was offset by softness in Electronics, Toys and some Home categories," said Gregg Steinhafel, chairman, president and chief executive officer of Target Corporation.
7. The ISM Services Index, a key measure for the health of the economy's service sector rose to the highest level since May 2006 to 57.1 in December, up from 55 in the prior month.
8. Ford's (NYSE: F) December U.S. sales rose 6.7 percent from last year to 190,976 units, better than analysts had expected. General Motor's (NYSE: GM) U.S. sales for its core brands rose 16 percent in the month, also better than expected.
9. In addition to the ISM services, other economic data continued to come in better than expected. Nov. Construction Spending: +0.4%, vs. Cons. +0.2%; Dec. ISM Manufacturing: 57, Inline; Prices Paid: 72.5, vs. Cons. 71.8; Nov. Factory Orders: +0.7%, vs. Cons. -0.1%.
10. The highest court in Massachusetts voided two foreclosures on home as the banks failed to show they held the mortgages at the time of foreclosure, upholding a lower court ruling. The Supreme Judicial Court ruling on Friday was against U.S. Bancorp (NYSE: USB) and Wells Fargo & Co. (NYSE: WFC), and may cause other foreclosures to be invalidated, especially in the instances where underlying documentation is lacking.
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2. On Monday Bank of America (NYSE: BAC) jumped higher after the company announced settlements with the GSEs over mortgage repurchase claims related to Countrywide --- something that has been a key overhang on the stock for some time. Bank of America is making a $1.28 billion cash payment to Freddie Mac that covers all outstanding loans and is making $1.34 billion cash payment to Fannie Mae that covers about 90% of outstanding loans.
3. Gold, which has been on a tear over the past few years, fell sharply this week. Illustrating the pressure in the precious metal, ETF SPDR Gold Shares (NYSE: GLD) fell 3.7% this week.
4. Qualcomm Incorporated (Nasdaq: QCOM) and Atheros Communications, Inc. (Nasdaq: ATHR) announced that they have entered into an agreement whereby Qualcomm will acquire all outstanding shares of Atheros for $45 per share, or a total consideration of $3.1 billion.
5. Goldman Sachs (NYSE: GS) is making a nearly $500 million investment in Facebook, valuing the social media juggernaut at $50 billion. In a rare move, Goldman is creating a "special purpose vehicle" to allow its high-net-worth clients to invest in Facebook, and demand has been red hot for a piece of the pre-IPO action.
6. Target (NYSE: TGT) shares fell on Thursday after reporting December comparable-store sales of up 0.9 percent, well below the consensus of up 3.9 percent. "December sales were below expectations, as strength in Grocery and Apparel was offset by softness in Electronics, Toys and some Home categories," said Gregg Steinhafel, chairman, president and chief executive officer of Target Corporation.
7. The ISM Services Index, a key measure for the health of the economy's service sector rose to the highest level since May 2006 to 57.1 in December, up from 55 in the prior month.
8. Ford's (NYSE: F) December U.S. sales rose 6.7 percent from last year to 190,976 units, better than analysts had expected. General Motor's (NYSE: GM) U.S. sales for its core brands rose 16 percent in the month, also better than expected.
9. In addition to the ISM services, other economic data continued to come in better than expected. Nov. Construction Spending: +0.4%, vs. Cons. +0.2%; Dec. ISM Manufacturing: 57, Inline; Prices Paid: 72.5, vs. Cons. 71.8; Nov. Factory Orders: +0.7%, vs. Cons. -0.1%.
10. The highest court in Massachusetts voided two foreclosures on home as the banks failed to show they held the mortgages at the time of foreclosure, upholding a lower court ruling. The Supreme Judicial Court ruling on Friday was against U.S. Bancorp (NYSE: USB) and Wells Fargo & Co. (NYSE: WFC), and may cause other foreclosures to be invalidated, especially in the instances where underlying documentation is lacking.
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