Top 10 News Items 12/28-12/31: Stocks Have Best Year Since '03, Attempted Terror Attack Adds Risk Trade, Treasury Removes Funding Caps on Fannie and Freddie
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1. Despite today's decline, stocks had a great year. The best since 2003. The Dow ended up about 20%, the S&P 500 up about 24% and the Nasdaq up about 44%. The gains are on top of the massive losses that were seen in the indices earlier in the year.
2. An attempted terrorist attack on Christmas aboard a Northwest Airline flight from Amsterdam to Detroit added a new element of risk into the market. The news sent airlines stocks like Delta Air Lines Inc. (NYSE: DAL) and UAL Corporation (Nasdaq: UAUA) lower on the week, but sent airport security stocks like American Science & Engineering Inc. (Nasdaq: ASEI), OSI Systems, Inc. (Nasdaq: OSIS), and ICx Technologies, Inc. (Nasdaq: ICXT) and L-3 Communications (NYSE: LLL) higher.
3. On Christmas-eve the Treasury removed the $200 billion funding caps on Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), basically giving the bailed-out mortgage funding companies unlimited access to government funds. Neither firm was close to the cap, raising eyebrows with investors and politicians.
4. GMAC Inc. has received another $3.8 billion in bailout funds, giving the embattled lender a third lifeline from the government. The U.S. government is now the largest stakeholder in the Detroit-based company, which is the largest lender to General Motors Co. and Chrysler Group LLC. The company had already received $12.5 billion in taxpayer dollars since the financial meltdown started last year. The government now has increased its stake in GMAC to 56 percent from 35 percent, the U.S. Treasury said in a press release on Wednesday.
5. Initial jobless claims dropped by 22,000 in the week ending on December 26 to 432,000, the lowest level since July 2008, according to figures from the Labor Department in Washington. Economists had expected that jobless claims would rise to 460,000 from the previous week's revised figure of 454,000. The 4-week moving average for jobless claims fell from 465,750 to 460,250, a decline of 5,500. Claims are down from the 26-year high of 674,000 in the week ending on March 27.
6. Home prices stabilized in October but disappointed the hopes for a sixth consecutive monthly increase according to the figures from the S&P/Case-Shiller indices. The S&P composite index that tracks home prices in 20 metropolitan areas was flat in October, short of the expectations of a 0.2 percent increase. Home prices have dropped 7.3 percent on the year according to S&P.
7. Data this week showed that Consumer Confidence in December rose to 52.9, up from 50.6 in November but slightly below the consensus of 53. The Present Situation Index declined to 18.8 from 21.2 in November. The index is up from an all-time low of 25 in February 2009, but hasn't broken out above the 50 range that it has been at since May.
8. The Federal Reserve Board proposed amendments to Regulation D (Reserve Requirements of Depository Institutions) that would enable the establishment of a term deposit facility. Under the proposal, the Federal Reserve Banks would offer interest-bearing term deposits to eligible institutions through an auction mechanism. Term deposits would be one of several tools that the Federal Reserve could employ to drain reserves to support the effective implementation of monetary policy.
9. Today's is Bank of America's (NYSE: BAC) controversial CEO Ken Lewis last day. In his place will step Brian Moynihan, a company insider that has held various executive positions at the company. The switch comes just weeks after the mega-bank paid back $45 billion in TARP. More
10. More details have been reported about Google's (NASDAQ: GOOG) Nexus One, which is now expected to be announced on January 5, 2010 and Apple's (Nasdaq: AAPL) tablet, which is expected to be released on January 26. Neither have been official announced by the companies.
2. An attempted terrorist attack on Christmas aboard a Northwest Airline flight from Amsterdam to Detroit added a new element of risk into the market. The news sent airlines stocks like Delta Air Lines Inc. (NYSE: DAL) and UAL Corporation (Nasdaq: UAUA) lower on the week, but sent airport security stocks like American Science & Engineering Inc. (Nasdaq: ASEI), OSI Systems, Inc. (Nasdaq: OSIS), and ICx Technologies, Inc. (Nasdaq: ICXT) and L-3 Communications (NYSE: LLL) higher.
3. On Christmas-eve the Treasury removed the $200 billion funding caps on Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), basically giving the bailed-out mortgage funding companies unlimited access to government funds. Neither firm was close to the cap, raising eyebrows with investors and politicians.
4. GMAC Inc. has received another $3.8 billion in bailout funds, giving the embattled lender a third lifeline from the government. The U.S. government is now the largest stakeholder in the Detroit-based company, which is the largest lender to General Motors Co. and Chrysler Group LLC. The company had already received $12.5 billion in taxpayer dollars since the financial meltdown started last year. The government now has increased its stake in GMAC to 56 percent from 35 percent, the U.S. Treasury said in a press release on Wednesday.
5. Initial jobless claims dropped by 22,000 in the week ending on December 26 to 432,000, the lowest level since July 2008, according to figures from the Labor Department in Washington. Economists had expected that jobless claims would rise to 460,000 from the previous week's revised figure of 454,000. The 4-week moving average for jobless claims fell from 465,750 to 460,250, a decline of 5,500. Claims are down from the 26-year high of 674,000 in the week ending on March 27.
6. Home prices stabilized in October but disappointed the hopes for a sixth consecutive monthly increase according to the figures from the S&P/Case-Shiller indices. The S&P composite index that tracks home prices in 20 metropolitan areas was flat in October, short of the expectations of a 0.2 percent increase. Home prices have dropped 7.3 percent on the year according to S&P.
7. Data this week showed that Consumer Confidence in December rose to 52.9, up from 50.6 in November but slightly below the consensus of 53. The Present Situation Index declined to 18.8 from 21.2 in November. The index is up from an all-time low of 25 in February 2009, but hasn't broken out above the 50 range that it has been at since May.
8. The Federal Reserve Board proposed amendments to Regulation D (Reserve Requirements of Depository Institutions) that would enable the establishment of a term deposit facility. Under the proposal, the Federal Reserve Banks would offer interest-bearing term deposits to eligible institutions through an auction mechanism. Term deposits would be one of several tools that the Federal Reserve could employ to drain reserves to support the effective implementation of monetary policy.
9. Today's is Bank of America's (NYSE: BAC) controversial CEO Ken Lewis last day. In his place will step Brian Moynihan, a company insider that has held various executive positions at the company. The switch comes just weeks after the mega-bank paid back $45 billion in TARP. More
10. More details have been reported about Google's (NASDAQ: GOOG) Nexus One, which is now expected to be announced on January 5, 2010 and Apple's (Nasdaq: AAPL) tablet, which is expected to be released on January 26. Neither have been official announced by the companies.
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