Top 10 News Items 11/21-11/25: US Investors Not Thankful for Europe; Pharmasset Acquired at 89% Premium; Fed Unveils '12 Bank Stress Tests
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Here is a recap of the top news items from this week on Wall Street:
1. European headlines continued to dominate US markets on this week's holiday-shortened session. Stocks traded sharply lower Monday morning, partly on the heels of concerns related to the rejection of joint bank guarantees by a number of EU governments. Italian yields were in focus yet again as prices of both two- and five-year bonds sunk to record lows. Fitch warned on France's AAA rating, saying the country cannot absorb many more shocks. Although equities closed lower on Wednesday, stocks ticked higher midday following comments from Angela Merkel she may now no longer be "categorically" ruling out Germany's backing of the issuance of eurozone bonds.
2. Shares of Pharmasset (Nasdaq: VRUS) surged a jaw-dropping 85 percent on Monday following news Gilead (Nasdaq: GILD) agreed to purchase the company for $137 per share in cash. The deal was valued at about $11 billion. Shares of Gilead sold off by about 9 percent on Monday, but bounced nicely on Tuesday and Wednesday.
3. The Fed launched its 2012 US banking stress test this week, an initiative which will require the US's top 19 institutions to be tested against adverse scenarios (similar to the tests run in 2009) in order to estimate sufficient levels of capital etc. Along with the stress tests, banks will now be required to submit annual capital plans with appropriate capital adequacy, internal capital adequacy assessment processes, and plans to make capital distributions, such as dividend payments or stock repurchases.
4. Obama's congressional supercommittee failed to reach an agreement on reductions in the federal deficit Monday, sending stocks sharply lower at the open. While the news was certainly jarring to both investors and non-investors, both Moody's and S&P affirmed the US credit ratings amid the committee's impasse.
5. Shares of Diamond Foods (Nasdaq: DMND) were absolutely clobbered this week as news of a director's suicide were believed to be tied to recent accounting issues which have the company's acquisition of the Pringles brand on hold. The stock fell more than 20 percent on Wednesday.
6. Shares of Groupon (Nasdaq: GRPN) traded sharply lower each day this week: down 10 percent on Monday, down 15 percent on Tuesday, another 15.5 percent on Wednesday and about 2 percent on Friday's half day. Groupon shares are now trading under $17, very notable after the company's IPO priced at $20 and opened for trade at $28.
7. Turmoil at Jefferies (NYSE: JEF) continued this week despite a company response to recent speculation on a possible MF-like run. Shares, however, bounced modestly this week, closing nearly 5 percent higher. An analyst at Oppenheimer stirred the pot by calling out an earlier rating downgrade from Egan-Jones, something which initially began pushing Jefferies shares lower. Fox Business' Charlie Gasparino this week reported Jefferies may not stay independent for long.
8. Shares of Focus Media (Nasdaq: FMCN) plunged 40 percent on Monday following a negative Muddy Waters report. The stock bounced about 15 percent on Tuesday as the company denied the claims "entirely," also saying it would provide results of a third-party investigation within the next two weeks. CEO Jason Jiang boosted his stake in the company to nearly 23 million shares on Friday.
9. The second reading on Q3 GDP showed slower-than-expected economic growth on Tuesday. The number was revised from 2.5 percent to 2.0 percent. The Street was looking for a flat reading at 2.5 percent.
10. Orders of durable goods fell less than expected this week, while orders of capital goods came in worse than expected. Durable goods orders for October fell 0.7 percent, compared to the economist estimate of down 1.2 percent. Capital goods orders fell 1.8 percent, worse than an expected 1 percent decline.
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1. European headlines continued to dominate US markets on this week's holiday-shortened session. Stocks traded sharply lower Monday morning, partly on the heels of concerns related to the rejection of joint bank guarantees by a number of EU governments. Italian yields were in focus yet again as prices of both two- and five-year bonds sunk to record lows. Fitch warned on France's AAA rating, saying the country cannot absorb many more shocks. Although equities closed lower on Wednesday, stocks ticked higher midday following comments from Angela Merkel she may now no longer be "categorically" ruling out Germany's backing of the issuance of eurozone bonds.
2. Shares of Pharmasset (Nasdaq: VRUS) surged a jaw-dropping 85 percent on Monday following news Gilead (Nasdaq: GILD) agreed to purchase the company for $137 per share in cash. The deal was valued at about $11 billion. Shares of Gilead sold off by about 9 percent on Monday, but bounced nicely on Tuesday and Wednesday.
3. The Fed launched its 2012 US banking stress test this week, an initiative which will require the US's top 19 institutions to be tested against adverse scenarios (similar to the tests run in 2009) in order to estimate sufficient levels of capital etc. Along with the stress tests, banks will now be required to submit annual capital plans with appropriate capital adequacy, internal capital adequacy assessment processes, and plans to make capital distributions, such as dividend payments or stock repurchases.
4. Obama's congressional supercommittee failed to reach an agreement on reductions in the federal deficit Monday, sending stocks sharply lower at the open. While the news was certainly jarring to both investors and non-investors, both Moody's and S&P affirmed the US credit ratings amid the committee's impasse.
5. Shares of Diamond Foods (Nasdaq: DMND) were absolutely clobbered this week as news of a director's suicide were believed to be tied to recent accounting issues which have the company's acquisition of the Pringles brand on hold. The stock fell more than 20 percent on Wednesday.
6. Shares of Groupon (Nasdaq: GRPN) traded sharply lower each day this week: down 10 percent on Monday, down 15 percent on Tuesday, another 15.5 percent on Wednesday and about 2 percent on Friday's half day. Groupon shares are now trading under $17, very notable after the company's IPO priced at $20 and opened for trade at $28.
7. Turmoil at Jefferies (NYSE: JEF) continued this week despite a company response to recent speculation on a possible MF-like run. Shares, however, bounced modestly this week, closing nearly 5 percent higher. An analyst at Oppenheimer stirred the pot by calling out an earlier rating downgrade from Egan-Jones, something which initially began pushing Jefferies shares lower. Fox Business' Charlie Gasparino this week reported Jefferies may not stay independent for long.
8. Shares of Focus Media (Nasdaq: FMCN) plunged 40 percent on Monday following a negative Muddy Waters report. The stock bounced about 15 percent on Tuesday as the company denied the claims "entirely," also saying it would provide results of a third-party investigation within the next two weeks. CEO Jason Jiang boosted his stake in the company to nearly 23 million shares on Friday.
9. The second reading on Q3 GDP showed slower-than-expected economic growth on Tuesday. The number was revised from 2.5 percent to 2.0 percent. The Street was looking for a flat reading at 2.5 percent.
10. Orders of durable goods fell less than expected this week, while orders of capital goods came in worse than expected. Durable goods orders for October fell 0.7 percent, compared to the economist estimate of down 1.2 percent. Capital goods orders fell 1.8 percent, worse than an expected 1 percent decline.
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