Top 10 News Items 12/27-12/30: Gold Below $1,600/Oz Again; Iran Threatens Blocking Strait of Hormuz; Sears Shares Plunge Following Warning, News of Store Closings
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Here is a recap of the top news items from this week on Wall Street:
1. Gold fell as much as $85 per ounce this week, joining silver in bear-market territory. The metal is down 20 percent from the all-time high of $1,923 per ounce set in September. In addition to continued concerns about the longevity of the euro heading into 2012, traders are attributing the weakness to some year-end hedge fund window dressing. Despite a modest bounce on Friday, gold will close 2011 trading below $1,570 per ounce.
2. Even in light of news Iran has warned it will block the hugely-important Strait of Hormuz if sanctioned by the US, crude oil edged lower this week. The Strait, which runs from Oman to south of Iran, has about 40 percent of the world's oil move through it. The US's sanctions would effectively penalize foreign firms which do business with Iran. Crude oil last traded at $98.98 per barrel.
3. Sears Holdings (Nasdaq: SHLD) shares fell 31 percent this week following a warning and news it will be closing 100-120 Kmart stores. Citing 2011 performance, the company said it will record a non-cash charge related to a valuation allowance on certain deferred tax assets of $1.6 to $1.8 billion in the fourth quarter. Click here to see the full report.
4. US consumer confidence for the month of December rose from 55.2 in November to 64.5. The Street was expecting a reading of 58.9. Factors having a positive influence on the reading include lower unemployment, and some of the cheapest gasoline seen since last February.
5. AMR (NYSE: AMR) was delisted by the NYSE this week. The stock fell 30 percent to $0.36 at the close, showing investors may be hoping some value will be left in the stock following bankruptcy. The stock will continue trading on the OTC markets.
6. Yields on Italian bonds rose for the first time in five days Wednesday, bolstered by recent lending by the European Central Bank. Financial institutions in Europe were lent €489 billion from the ECB, prompting an increase in demand for Italian as well as Spanish notes. Italian 10-year bond yields fell 25 basis points to 6.75 percent, while rates on 10-year Spanish debt dropped 24 basis points to 5.09 percent.
7. Shares of Mead Johnson (NYSE: MJN) held up this week despite continued fears related to the company's Enfamil baby formula. The company confirmed the safety of the product, saying there are no signs of cronobacter. On Thursday a Citi analyst defended the stock, saying the sickness of an Illinois baby was not infected with cronobacter.
8. A number of data points came in on the Housing sector this week: S&P/Case-Shiller for October down 0.62 percent to 140.30 and November pending home sales which rose a much better than expected 7.3 percent.
9. A little analyst battle on shares of Amazon.com (Nasdaq: AMZN) ensued this week after a Goldman Sachs analyst issued a note Thursday morning suggesting the company would miss its sales guidance for the fourth quarter. The comments had the stock down as much as 4 percent early that morning. Comments defending Amazon and the quarterly top-line result from Piper Jaffray's Gene Munster and JPMorgan pushed shares higher into the close, and Amazon closed the session only down 0.02 percent.
10. First-time jobless claims for the week ended December 24th rose from an upwardly-revised 366,000 to 381,000. The four-week average dropped to 375,000 last week, the lowest level since June '08.
1. Gold fell as much as $85 per ounce this week, joining silver in bear-market territory. The metal is down 20 percent from the all-time high of $1,923 per ounce set in September. In addition to continued concerns about the longevity of the euro heading into 2012, traders are attributing the weakness to some year-end hedge fund window dressing. Despite a modest bounce on Friday, gold will close 2011 trading below $1,570 per ounce.
2. Even in light of news Iran has warned it will block the hugely-important Strait of Hormuz if sanctioned by the US, crude oil edged lower this week. The Strait, which runs from Oman to south of Iran, has about 40 percent of the world's oil move through it. The US's sanctions would effectively penalize foreign firms which do business with Iran. Crude oil last traded at $98.98 per barrel.
3. Sears Holdings (Nasdaq: SHLD) shares fell 31 percent this week following a warning and news it will be closing 100-120 Kmart stores. Citing 2011 performance, the company said it will record a non-cash charge related to a valuation allowance on certain deferred tax assets of $1.6 to $1.8 billion in the fourth quarter. Click here to see the full report.
4. US consumer confidence for the month of December rose from 55.2 in November to 64.5. The Street was expecting a reading of 58.9. Factors having a positive influence on the reading include lower unemployment, and some of the cheapest gasoline seen since last February.
5. AMR (NYSE: AMR) was delisted by the NYSE this week. The stock fell 30 percent to $0.36 at the close, showing investors may be hoping some value will be left in the stock following bankruptcy. The stock will continue trading on the OTC markets.
6. Yields on Italian bonds rose for the first time in five days Wednesday, bolstered by recent lending by the European Central Bank. Financial institutions in Europe were lent €489 billion from the ECB, prompting an increase in demand for Italian as well as Spanish notes. Italian 10-year bond yields fell 25 basis points to 6.75 percent, while rates on 10-year Spanish debt dropped 24 basis points to 5.09 percent.
7. Shares of Mead Johnson (NYSE: MJN) held up this week despite continued fears related to the company's Enfamil baby formula. The company confirmed the safety of the product, saying there are no signs of cronobacter. On Thursday a Citi analyst defended the stock, saying the sickness of an Illinois baby was not infected with cronobacter.
8. A number of data points came in on the Housing sector this week: S&P/Case-Shiller for October down 0.62 percent to 140.30 and November pending home sales which rose a much better than expected 7.3 percent.
9. A little analyst battle on shares of Amazon.com (Nasdaq: AMZN) ensued this week after a Goldman Sachs analyst issued a note Thursday morning suggesting the company would miss its sales guidance for the fourth quarter. The comments had the stock down as much as 4 percent early that morning. Comments defending Amazon and the quarterly top-line result from Piper Jaffray's Gene Munster and JPMorgan pushed shares higher into the close, and Amazon closed the session only down 0.02 percent.
10. First-time jobless claims for the week ended December 24th rose from an upwardly-revised 366,000 to 381,000. The four-week average dropped to 375,000 last week, the lowest level since June '08.
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