Top 10 News Items 11/22-11/26: Numerous Hedge Funds Questioned in Insider Trading Probe, Several Firms Raided; Irish Concerns Spark Renewed Euro Debt-Contagion; Private-Equity Lighting Up the Market
Here is a recap of the top news items from this week on Wall Street:
1. Amid the recent insider trading probe, the offices of several money mangers were raided this week, while several other funds were asked for general information related to financial statements, etc. On Monday, Diamondback and Level Global were the targets of the FBI, both run by former SAC Capital managers. Loch Capital Management out of Boston was also named. Later in the week, Steve Cohen's fund was directly approached for information; the massive Janus (NYSE: JNS) was also asked for documents.
2. Details of the Irish budget plan were released this week. The country's government is looking at about €10 billion in spending cuts, about €5 billion in tax raises and about €2.8 billion in welfare cuts by 2014. Ireland will also cut pay for new government workers, raises its VAT and cut its minimum hourly wage by €1. Shares of Allied Irish Banks (NYSE: AIB) and Bank of Ireland (NYSE: IRE) fell extremely sharply amid the news. Issues with Irish debt have also brought back fears related to the debt levels of other European countries. Portugal, Spain and Greece were all back in the news this week.
3. Private-equity deals are, as we like to say, "en fuego." Over this week's four trading sessions (the stock market was closed on Thursday due to the observance of Thanksgiving), three large deals were announced: Novell (Nasdaq: NOVL) was acquired by AttachMate for $6.10/share, J. Crew (NYSE: JCG) was taken private in a $3 billion deal and on Friday, Del Monte Foods (NYSE: DLM) was acquired in a $4 billion deal.
4. Hewlett-Packard (NYSE: HPQ) reported its Q4 results this week, sending shares about 2% higher on Tuesday. The tech bellweather posted quarterly EPS of $1.33, beating the Street by 6 cents, on sales of $33.3 billion. Looking forward, HP sees first-quarter adjusted earnings of $1.29 to $1.30 per share on sales of $32.98 billion to $33 billion, compared to the consensus of $1.22 per share and $32.75 billion respectively. For the full year 2011, the company raises its sales forecast to a range of $131.5 billion to $133.5 billion, with full year 2011 earnings of $5.16 to $5.26 per share. The Street is looking for sales of $132.4 billion with earnings of $5.11.
5. Also on the earnings front, Guess? (NYSE: GES) reported Q3 EPS of 75c on sales of $613.9 million. The Street was looking for EPS of 59c on sales of $580.44 million. Sees Q4 EPS of $1.02-$1.06 on sales of $710-$730 million. The Street is looking for EPS of $1.02 on sales of $694.56 million. Raises FY11 EPS guidance from $2.80-$2.85 to $3.02-$3.06, vs. the consensus of $2.92. Additionally, the retailer announced it would be raising its quarterly dividend to 20c/share and that it will be paying a $2/share special dividend. The stock rose more than 10% on Wednesday.
6. The number of people filing for unemployment benefits fell to the lowest level since July 2008 last week, marking a sign that the jobs market is improving in the sluggish economic recovery. The Labor Department reported on Wednesday that jobless claims fell by 34,000 to a seasonally adjusted rate of 407,000 for the week ended November 20. Economists had expected a drop of 6,000 to a seasonally adjusted rate of 435,000.
7. Despite strong Q4 results and decent guidance from Deere (NYSE: DE) this week, shares remained flat.
8. US Q3 GDP growth was revised from 2% to 2.5% this week; the Street had been looking for a reading of 2.4%. Economists attributed the better-than-expected data point to strength in consumer spending.
9. Existing home sales for the month of October came in at 4.43 million, vs. the economist estimate of 4.48 million, down about 2.2% MoM and 1.1% YoY. New home sales, meanwhile, came in at 283,000, down 8.1% from September but up 1.6% from last year's October reading.
10. The Fed released its minutes for the FOMC meeting from November 2nd and 3rd this week. Among other issues, several members suggested that although the recent QE measures will likely put unwanted pressure on the dollar, benefits appear to exceed costs. Click here to see the full minutes.
1. Amid the recent insider trading probe, the offices of several money mangers were raided this week, while several other funds were asked for general information related to financial statements, etc. On Monday, Diamondback and Level Global were the targets of the FBI, both run by former SAC Capital managers. Loch Capital Management out of Boston was also named. Later in the week, Steve Cohen's fund was directly approached for information; the massive Janus (NYSE: JNS) was also asked for documents.
2. Details of the Irish budget plan were released this week. The country's government is looking at about €10 billion in spending cuts, about €5 billion in tax raises and about €2.8 billion in welfare cuts by 2014. Ireland will also cut pay for new government workers, raises its VAT and cut its minimum hourly wage by €1. Shares of Allied Irish Banks (NYSE: AIB) and Bank of Ireland (NYSE: IRE) fell extremely sharply amid the news. Issues with Irish debt have also brought back fears related to the debt levels of other European countries. Portugal, Spain and Greece were all back in the news this week.
3. Private-equity deals are, as we like to say, "en fuego." Over this week's four trading sessions (the stock market was closed on Thursday due to the observance of Thanksgiving), three large deals were announced: Novell (Nasdaq: NOVL) was acquired by AttachMate for $6.10/share, J. Crew (NYSE: JCG) was taken private in a $3 billion deal and on Friday, Del Monte Foods (NYSE: DLM) was acquired in a $4 billion deal.
4. Hewlett-Packard (NYSE: HPQ) reported its Q4 results this week, sending shares about 2% higher on Tuesday. The tech bellweather posted quarterly EPS of $1.33, beating the Street by 6 cents, on sales of $33.3 billion. Looking forward, HP sees first-quarter adjusted earnings of $1.29 to $1.30 per share on sales of $32.98 billion to $33 billion, compared to the consensus of $1.22 per share and $32.75 billion respectively. For the full year 2011, the company raises its sales forecast to a range of $131.5 billion to $133.5 billion, with full year 2011 earnings of $5.16 to $5.26 per share. The Street is looking for sales of $132.4 billion with earnings of $5.11.
5. Also on the earnings front, Guess? (NYSE: GES) reported Q3 EPS of 75c on sales of $613.9 million. The Street was looking for EPS of 59c on sales of $580.44 million. Sees Q4 EPS of $1.02-$1.06 on sales of $710-$730 million. The Street is looking for EPS of $1.02 on sales of $694.56 million. Raises FY11 EPS guidance from $2.80-$2.85 to $3.02-$3.06, vs. the consensus of $2.92. Additionally, the retailer announced it would be raising its quarterly dividend to 20c/share and that it will be paying a $2/share special dividend. The stock rose more than 10% on Wednesday.
6. The number of people filing for unemployment benefits fell to the lowest level since July 2008 last week, marking a sign that the jobs market is improving in the sluggish economic recovery. The Labor Department reported on Wednesday that jobless claims fell by 34,000 to a seasonally adjusted rate of 407,000 for the week ended November 20. Economists had expected a drop of 6,000 to a seasonally adjusted rate of 435,000.
7. Despite strong Q4 results and decent guidance from Deere (NYSE: DE) this week, shares remained flat.
8. US Q3 GDP growth was revised from 2% to 2.5% this week; the Street had been looking for a reading of 2.4%. Economists attributed the better-than-expected data point to strength in consumer spending.
9. Existing home sales for the month of October came in at 4.43 million, vs. the economist estimate of 4.48 million, down about 2.2% MoM and 1.1% YoY. New home sales, meanwhile, came in at 283,000, down 8.1% from September but up 1.6% from last year's October reading.
10. The Fed released its minutes for the FOMC meeting from November 2nd and 3rd this week. Among other issues, several members suggested that although the recent QE measures will likely put unwanted pressure on the dollar, benefits appear to exceed costs. Click here to see the full minutes.
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