Top 10 News Items 12/14-12/18: Citi Stumbles to Repay TARP, Abu Dhabi Extends $10B Bailout to Dubai, Exxon Acquires XTO in $41B Deal
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Here is a recap of the top news items from this week on Wall Street:
1. Following in the footsteps of BofA's move earlier this month, Citigroup (NYSE: C) finally announced a plan to repay its borrowed TARP funds this week. In order to pay back taxpayers, the firm needed to sell $17 billion in an equity offering, and also have the US Treasury sell a $5 billion chunk of its holdings. However, demand for the offering was somewhat weak and when the Treasury heard that Citi's secondary would be priced at $3.15, they delayed the sale of their portion. Citi shares fell about 16% this week.
2. Several weeks after debt concerns in Dubai rattled the markets, the Emirate announced that Abu Dhabi would extend a $10 billion bailout to the struggling world's fastest-growing metropolis.
3. ExxonMobil (NYSE: XOM) and XTO Energy (NYSE: XTO) announced a mega-merger this week, with Exxon acquiring the nat-gas company in a deal valued at $41 billion (including $10 billion in debt). Shares of XTO surged more than 15% on Monday, but fell everyday after that.
4. On Wednesday the FTC announced that it is suing Intel Corp. (NASDAQ: INTC), charging that the company has illegally kept the competition from gaining market share for a decade. The FTC said in the complaint that Intel has successfully kept potentially superior CPUs off the market so not to threaten the monopoly the company has created for itself. Intel shares fell on Wednesday and Thursday, but took back the losses on Friday. Shares of NVIDIA (NYSE: NVDA) rose 8% on Wednesday and shares of AMD (NYSE: AMD) rose about 4%.
5. Bank of America (NYSE: BAC) finally announced a replacement for Ken Lewis in the CEO position, internal candidate Brian Moynahan.
6. Research In Motion (Nasdaq: RIMM) shares surged more than 10% on Friday as strong Q3 earnings surprised the Street. Earnings came in at $1.10, 6 cents better than the analyst consensus, while sales were $3.9 billion. The BlackBerry maker guided Q4 sales to $4.2-$4.4 billion and EPS to $1.23-$1.31.
7. Wells Fargo (NYSE: WFC) announced it would repay the TARP this week, raising $12.25 billion in an equity offering. Shares of WFC rose everyday this week, adding about 5% over the course.
8. The Fed kept the US's key interest rates at 0-0.25% this week, also failing to change any of the oft-scrutinized language, saying rates will be "exceptionally low" for an "extended period".
9. Education stocks tumbled late this week following news that the Office of Inspector General for the US Dept of Education (OIG) sent a letter The Higher Learning Commission (HLC) questioning the accreditation decisions of the group. The matter centers around the commission's choice in granting Career Education's (Nasdaq: CECO) AIU full initial accreditation with no limitations despite major issues. The OIG stated "We recommend that the Office of Postsecondary Education (OPE) determine whether HLC is in compliance with 34 C.F.R. Part 602 and, if not, take appropriate action under 34 C.F.R. Part 602 to limit, suspend, or terminate HLC's recognition by the Secretary."
10. Investors were spooked on Tuesday of this week when last month's PPI reading came in much higher than analysts had been expecting: 1.4%, vs. the consensus of 0.4%. Inflation concerns made the rounds, but Wednesday, were soothed as the CPI reading came in inline with what economists had been expecting.
1. Following in the footsteps of BofA's move earlier this month, Citigroup (NYSE: C) finally announced a plan to repay its borrowed TARP funds this week. In order to pay back taxpayers, the firm needed to sell $17 billion in an equity offering, and also have the US Treasury sell a $5 billion chunk of its holdings. However, demand for the offering was somewhat weak and when the Treasury heard that Citi's secondary would be priced at $3.15, they delayed the sale of their portion. Citi shares fell about 16% this week.
2. Several weeks after debt concerns in Dubai rattled the markets, the Emirate announced that Abu Dhabi would extend a $10 billion bailout to the struggling world's fastest-growing metropolis.
3. ExxonMobil (NYSE: XOM) and XTO Energy (NYSE: XTO) announced a mega-merger this week, with Exxon acquiring the nat-gas company in a deal valued at $41 billion (including $10 billion in debt). Shares of XTO surged more than 15% on Monday, but fell everyday after that.
4. On Wednesday the FTC announced that it is suing Intel Corp. (NASDAQ: INTC), charging that the company has illegally kept the competition from gaining market share for a decade. The FTC said in the complaint that Intel has successfully kept potentially superior CPUs off the market so not to threaten the monopoly the company has created for itself. Intel shares fell on Wednesday and Thursday, but took back the losses on Friday. Shares of NVIDIA (NYSE: NVDA) rose 8% on Wednesday and shares of AMD (NYSE: AMD) rose about 4%.
5. Bank of America (NYSE: BAC) finally announced a replacement for Ken Lewis in the CEO position, internal candidate Brian Moynahan.
6. Research In Motion (Nasdaq: RIMM) shares surged more than 10% on Friday as strong Q3 earnings surprised the Street. Earnings came in at $1.10, 6 cents better than the analyst consensus, while sales were $3.9 billion. The BlackBerry maker guided Q4 sales to $4.2-$4.4 billion and EPS to $1.23-$1.31.
7. Wells Fargo (NYSE: WFC) announced it would repay the TARP this week, raising $12.25 billion in an equity offering. Shares of WFC rose everyday this week, adding about 5% over the course.
8. The Fed kept the US's key interest rates at 0-0.25% this week, also failing to change any of the oft-scrutinized language, saying rates will be "exceptionally low" for an "extended period".
9. Education stocks tumbled late this week following news that the Office of Inspector General for the US Dept of Education (OIG) sent a letter The Higher Learning Commission (HLC) questioning the accreditation decisions of the group. The matter centers around the commission's choice in granting Career Education's (Nasdaq: CECO) AIU full initial accreditation with no limitations despite major issues. The OIG stated "We recommend that the Office of Postsecondary Education (OPE) determine whether HLC is in compliance with 34 C.F.R. Part 602 and, if not, take appropriate action under 34 C.F.R. Part 602 to limit, suspend, or terminate HLC's recognition by the Secretary."
10. Investors were spooked on Tuesday of this week when last month's PPI reading came in much higher than analysts had been expecting: 1.4%, vs. the consensus of 0.4%. Inflation concerns made the rounds, but Wednesday, were soothed as the CPI reading came in inline with what economists had been expecting.
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