Top 10 News Items 11/28-12/02: Markets Surge Amid Global Coordinated Effort on Dollar Swaps; Unemployment Rate Falls to 8.6%; China Cuts Bank Reserve Requirements
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Here is a recap of the top news items from this week on Wall Street:
1. The Dow Jones Industrial Average rallied 490 points on Wednesday following a surprise coordinated move from the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank to enhance their capacity to provide liquidity support to the global financial system. These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap rate plus 50 basis points.
2. Although nonfarm, private and manufacturing payroll data on Friday for the month of November rose less than expected, the unemployment rate dropped sharply from 9.0% to 8.6%. Nonfarm payrolls rose 120,000, vs. the economist estimate of 125,000, private payrolls were up 140,000, vs. the estimate of 150,000, and manufacturing payrolls rose 2,000, vs. the estimate of 9,000. The initial reading for November nonfarm payrolls was revised higher from 80,000 to 100,000.
3. Stocks opened higher on Tuesday, partly on the heels of news out of China regulators cut bank reserve requirements for the first time since 2008. The People's Bank of China said it will cut the amount Chinese banks have to set aside for reserves by 50 basis points effective December 5.
4. Shares of AMR (NYSE: AMR) plunged almost 84 percent on Tuesday (from a close on Monday of $1.62 to $0.26) after the company announced a filing for Chapter 11 Bankruptcy Protection. Shares bounced to finish the week, gaining more than 40 percent over Wednesday, Thursday and Friday.
5. European Central banks and the IMF may be considering a plan to move loans through the IMF, a measure which could effectively draw about €200 billion ($270 billion) in aid to countries dealing with a financial shock. Under one option being considered, European funds will move into the IMF and would then be earmarked for troubled eurozone countries. The other option would be to move the money into the IMF's general resources. While the market liked the news, there are skeptics.
6. IPO investors got all hot-and-bothered this week following rumors Facebook may file its IPO with the SEC as soon as next month, with a target to hit the market between April to June of 2012. Sources say Facebook will probably look to raise $10 billion in the offering.
7. Standard and Poor's Ratings Services applied new ratings criteria to its bank universe on Tuesday, causing the downgrade of a litany of bank ratings including: BofA (NYSE: BAC), Citi (NYSE: C), Goldman (NYSE: GS), Wells Fargo (NYSE: WFC), Morgan Stanley (NYSE: MS), JPMorgan (NYSE: JPM) and a number of Eurobanks.
8. Research In Motion (Nasdaq: RIMM) shares tumbled nearly 10 percent on Friday following news of a $485 million pretax provision related to its inventory valuation of BlackBerry PlayBook tablets. The company updated guidance as a result. Click here to see full details.
9. Clearwire (Nasdaq: CLWR) shares rose 14 percent on Thursday and another 5 percent on Friday following news Sprint (NYSE: S) entered into a $1.6 billion pact with the company under which Clearwire will provide WiMAX services for the next four years. Clearwire also said it has made interest payments totaling $237 million on its first-priority, second-priority and exchangeable notes which were due Dec. 1, 2011.
10. Consumer confidence for the month of November rose sharply from 40.9 in October to 56. The Street was looking for a reading around 44. The data point pushed markets slightly higher on Tuesday.
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1. The Dow Jones Industrial Average rallied 490 points on Wednesday following a surprise coordinated move from the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank to enhance their capacity to provide liquidity support to the global financial system. These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap rate plus 50 basis points.
2. Although nonfarm, private and manufacturing payroll data on Friday for the month of November rose less than expected, the unemployment rate dropped sharply from 9.0% to 8.6%. Nonfarm payrolls rose 120,000, vs. the economist estimate of 125,000, private payrolls were up 140,000, vs. the estimate of 150,000, and manufacturing payrolls rose 2,000, vs. the estimate of 9,000. The initial reading for November nonfarm payrolls was revised higher from 80,000 to 100,000.
3. Stocks opened higher on Tuesday, partly on the heels of news out of China regulators cut bank reserve requirements for the first time since 2008. The People's Bank of China said it will cut the amount Chinese banks have to set aside for reserves by 50 basis points effective December 5.
4. Shares of AMR (NYSE: AMR) plunged almost 84 percent on Tuesday (from a close on Monday of $1.62 to $0.26) after the company announced a filing for Chapter 11 Bankruptcy Protection. Shares bounced to finish the week, gaining more than 40 percent over Wednesday, Thursday and Friday.
5. European Central banks and the IMF may be considering a plan to move loans through the IMF, a measure which could effectively draw about €200 billion ($270 billion) in aid to countries dealing with a financial shock. Under one option being considered, European funds will move into the IMF and would then be earmarked for troubled eurozone countries. The other option would be to move the money into the IMF's general resources. While the market liked the news, there are skeptics.
6. IPO investors got all hot-and-bothered this week following rumors Facebook may file its IPO with the SEC as soon as next month, with a target to hit the market between April to June of 2012. Sources say Facebook will probably look to raise $10 billion in the offering.
7. Standard and Poor's Ratings Services applied new ratings criteria to its bank universe on Tuesday, causing the downgrade of a litany of bank ratings including: BofA (NYSE: BAC), Citi (NYSE: C), Goldman (NYSE: GS), Wells Fargo (NYSE: WFC), Morgan Stanley (NYSE: MS), JPMorgan (NYSE: JPM) and a number of Eurobanks.
8. Research In Motion (Nasdaq: RIMM) shares tumbled nearly 10 percent on Friday following news of a $485 million pretax provision related to its inventory valuation of BlackBerry PlayBook tablets. The company updated guidance as a result. Click here to see full details.
9. Clearwire (Nasdaq: CLWR) shares rose 14 percent on Thursday and another 5 percent on Friday following news Sprint (NYSE: S) entered into a $1.6 billion pact with the company under which Clearwire will provide WiMAX services for the next four years. Clearwire also said it has made interest payments totaling $237 million on its first-priority, second-priority and exchangeable notes which were due Dec. 1, 2011.
10. Consumer confidence for the month of November rose sharply from 40.9 in October to 56. The Street was looking for a reading around 44. The data point pushed markets slightly higher on Tuesday.
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