Top 10 News Items 10/20-10/24: Markets Volatile as Fear Spreads Across the Globe

October 24, 2008 4:17 PM EDT

Here is a recap of the major news items from this week:

1. Stock markets across the globe sold-off drastically this week as concerns which originated in the US have now spread to other economies. Talks of a global recession made headlines around the world, reinforcing the old Wall Street adage "when the US sneezes, the rest of the world catches the flu". Emerging markets felt heavy pressure from this speculation; Argentina's Merval sank this week following its government's announcement that it needed to take over private pension plans. Pessimism hit a near-term peak Thursday and Friday when markets around the world began responding to action in the US markets: Germany's DAX fell over 10%, the French CAC40 sank 10% and UK's FTSE 100 slipped nearly 9%, while Japan's Nikkei 25 fell 10% and South Korea's Kospi sank 10%. Following the decline in foreign markets, US futures trading was halted Friday morning as the Dow had plunged more than 500 points by 7am ET. Many traders believed Friday's open would bring the final wave of panic selling, but as the indices bounced off their lows following the open, these hopes faded.

2. Credit markets continued to show improving signs this week, as key rate indicators such as 3-month LIBOR and the Ted spread pulled back from all-time highs.

3. Presenting to the Committee on the Budget Monday, Fed Chairman Ben Bernanke said the "consideration of a new stimulus package is appropriate."

4. Thursday, former Fed Chairman Alan Greenspan testified before the House Oversight Committee as regulators are determined to find out how the US economy got itself into this crisis. Greenspan gave his view of the ongoing credit crisis, calling the current situation "a once-in-a-century credit tsunami". Greenspan also admitted that his free-market ideology shunning regulation was flawed, something that he has yet to fess up to.

5. With crude oil falling from about $72 to under $65 this week, talks of a global oil glut have been heard around the Street. Responding to the concerning (for supporters of oil) supply and demand picture, OPEC announced a cut to oil production for the first time in nearly 2 years. Such an announcement is often considered very bullish for crude oil prices, but crude continued declining on Friday following the decision, suggesting that OPEC's market power is not as lofty as pundits had previously thought.

6. Following weeks of speculation, National City (NYSE: NCC) was finally offered a bid by fellow regional back PNC Financial (NYSE: PNC). PNC announced its $2.23 per share offering for National City Friday, at which time shares of National City tumbled as its closing price Thursday was actually higher than PNC's offer.

7. The height of the Q3 earnings season got under way this week with reports from Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: AAPL). While both companies beat the Street on the top line, they also both issued conservative guidance. Shares of Apple traded higher on the report and Microsoft remained relatively flat following the results. Also on the earnings front, UPS (NYSE: UPS), McDonald's (NYSE: MCD), Dow Chemical (NYSE: DOW), Potash (NYSE: POT), Eli Lilly (NYSE: LLY), and Baidu (Nasdaq: BIDU) topped Street expectations, while Boeing (NYSE: BA) and AT&T (NYSE: T) reported earnings just shy of consensus estimates.

8. Wednesday morning, Samsung announced that it had withdrawn its offer to acquire all the shares of SanDisk (Nasdaq: SNDK) for $26 per share in cash. Shares of SanDisk plummeted more than 30% on that day but by Friday's close, bearish investors added another 20% to that decline.

9. This week, Kirk Kerkorian's Tracinda announced that it had sold 7.3 million shares of Ford (NYSE: F) recently, with the intention to sell the remainder of his stake in order to focus on his investment in MGM MIRAGE (NYSE: MGM). The announcement caused continued selling in carmakers across the board.

10. Confidence in the credit rating agencies was questioned this week as a House testimony was released disclosing e-mail's in which employees clearly knew that AAA ratings given out to certain companies were not legitimate. A favorite conversation between two employees admitted that "We rate every deal. It could be structured by cows and we would rate it".

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• Kirk Kerkorian
• Tracinda Corp.
• Ben S. Bernanke
• Alan Greenspan
• StreetInsider.com Top 10 News Items for the Week
• Crude Oil
• OPEC

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