Top 10 News Items 1/25-1/29: Bernanke Confirmed for Second Term as Fed Chairman, GDP in Q4 Surged 5.7%, Apple Unveils the iPad
Here is a recap of the top news items from this week on Wall Street:
1. Following weeks of battle and debate, Ben Bernanke was reconfirmed as the Fed's Chairman this week. In a 70-30 vote on Thursday afternoon, the Senate accepted Bernanke in the closest vote for a Fed chairman in nearly 32 years. The nomination came after a procedural vote in the Senate where supporters of Bernanke warned that not bringing him back would kick the legs out from under the already fragile recovery from the economic recession.
2. GDP data for the last quarter of '09 showed that the economy grew at a rapid 5.7% pace -- a growth level not seen since 2003. Economists had been expecting a 4.7% rise. The strong growth rate announced by the Commerce Department is, so far, the strongest evidence to date that the worst recession since the 1930s in fact ended last year.
3. After years of speculation and months of rumors, Apple (Nasdaq: AAPL) finally unveiled its new tablet device -- the iPad. The device essentially is a super-sized iPhone that looks to be faster. The dimensions come in at a half an inch thick, 1.5 pounds and a 9.7 inch IPS display that has a full capacitive multi-touch interface. The iPad will be powered by the 1GHz Apple A4 silicon chip, with built in WiFi 801.11n and Bluetooth 2.1 EDR connectivity. The device is to be shipped in 16GB and 32GB and is priced starting at $499. The same positive sentiment that prevailed following the unveiling of the iPhone or new iPod's does not seem to be there with the iPad. Skeptics of the device point to its lack of multi-tasking, a USB slot and flash. After Apple's presentation to unveil the device on Wednesday, shares of Apple sold-off by almost 8% to close this week's trading session.
4. As expected, the FOMC decided to keep the federal funds rate at 0 to 1/4 percent this week. The FOMC made this decision despite information they have received showing that economic activity has continued to strengthen and that the deterioration in the labor market is abating. The FOMC continues to anticipate that economic conditions "are likely to warrant exceptionally low levels of the federal funds rate for an extended period." In today's announcement it was noted that there was a lone Fed member that voted against the decision to keep rates unchanged - Tom Hoenig.
5. Shares of Toyota (NYSE: TM) fell more than 8% on Wednesday following news that it is instructing Toyota dealers to temporarily suspend sales of eight models involved in the recall for sticking accelerator pedal. The automaker said that it will recall approximately 2.3 million vehicles to correct sticking accelerator pedals on specific Toyota Division models: 2009-2010 RAV4, 2009-2010 Corolla, 2009-2010 Matrix, 2005-2010 Avalon, Certain 2007-2010 Camry, 2010 Highlander, 2007-2010 Tundra, 2008-2010 Sequoia.
6. Earnings season continued this week. In the tech space: Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT) and Amazon (Nasdaq: AMZN).
7. The U.S. Treasury could receive more funds to cover the nation's bills this year as the Senate voted to set the limit on government borrowing at an all-time high of $14.3 trillion. The increase of $1.9 trillion was based by the Senate, with all 60 Democrats voting for it and 39 Republicans against it.
8. Elsewhere on the earnings front: Ford (NYSE: F), Verizon (NYSE: VZ) Johnson & Johnson (NYSE: JNJ), Proctor & Gamble (NYSE: PG), Caterpillar (NYSE: CAT) and Boeing (NYSE: BA).
9. Standard & Poor's made some rather startling comments on the U.K banking system, saying they no longer classify it as among the most stable and low-risk banking systems globally. The firm is taking this view due to the weak economic environment, the reputational damage, and high dependence on state-support. S&P ranked the U.K. banking system at 3, in a scale that range from 1 as the strongest and 10 as the weakest.
10. Sales of previously occupied homes fell farther in December than in any month in more than 40 years, affected by the deadline for the first-time home buyer tax credit being extended by lawmakers. December sales fell 16.7 percent, well ahead of the economist estimate of 10 percent, to a seasonally adjusted annual rate of 5.45 million. The rate of 6.54 million in November was unchanged according to the report from the National Association of Realtors on Monday. Still, the XHB (NYSE: XHB) closed this week's trading session up about 1%.
1. Following weeks of battle and debate, Ben Bernanke was reconfirmed as the Fed's Chairman this week. In a 70-30 vote on Thursday afternoon, the Senate accepted Bernanke in the closest vote for a Fed chairman in nearly 32 years. The nomination came after a procedural vote in the Senate where supporters of Bernanke warned that not bringing him back would kick the legs out from under the already fragile recovery from the economic recession.
2. GDP data for the last quarter of '09 showed that the economy grew at a rapid 5.7% pace -- a growth level not seen since 2003. Economists had been expecting a 4.7% rise. The strong growth rate announced by the Commerce Department is, so far, the strongest evidence to date that the worst recession since the 1930s in fact ended last year.
3. After years of speculation and months of rumors, Apple (Nasdaq: AAPL) finally unveiled its new tablet device -- the iPad. The device essentially is a super-sized iPhone that looks to be faster. The dimensions come in at a half an inch thick, 1.5 pounds and a 9.7 inch IPS display that has a full capacitive multi-touch interface. The iPad will be powered by the 1GHz Apple A4 silicon chip, with built in WiFi 801.11n and Bluetooth 2.1 EDR connectivity. The device is to be shipped in 16GB and 32GB and is priced starting at $499. The same positive sentiment that prevailed following the unveiling of the iPhone or new iPod's does not seem to be there with the iPad. Skeptics of the device point to its lack of multi-tasking, a USB slot and flash. After Apple's presentation to unveil the device on Wednesday, shares of Apple sold-off by almost 8% to close this week's trading session.
4. As expected, the FOMC decided to keep the federal funds rate at 0 to 1/4 percent this week. The FOMC made this decision despite information they have received showing that economic activity has continued to strengthen and that the deterioration in the labor market is abating. The FOMC continues to anticipate that economic conditions "are likely to warrant exceptionally low levels of the federal funds rate for an extended period." In today's announcement it was noted that there was a lone Fed member that voted against the decision to keep rates unchanged - Tom Hoenig.
5. Shares of Toyota (NYSE: TM) fell more than 8% on Wednesday following news that it is instructing Toyota dealers to temporarily suspend sales of eight models involved in the recall for sticking accelerator pedal. The automaker said that it will recall approximately 2.3 million vehicles to correct sticking accelerator pedals on specific Toyota Division models: 2009-2010 RAV4, 2009-2010 Corolla, 2009-2010 Matrix, 2005-2010 Avalon, Certain 2007-2010 Camry, 2010 Highlander, 2007-2010 Tundra, 2008-2010 Sequoia.
6. Earnings season continued this week. In the tech space: Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT) and Amazon (Nasdaq: AMZN).
7. The U.S. Treasury could receive more funds to cover the nation's bills this year as the Senate voted to set the limit on government borrowing at an all-time high of $14.3 trillion. The increase of $1.9 trillion was based by the Senate, with all 60 Democrats voting for it and 39 Republicans against it.
8. Elsewhere on the earnings front: Ford (NYSE: F), Verizon (NYSE: VZ) Johnson & Johnson (NYSE: JNJ), Proctor & Gamble (NYSE: PG), Caterpillar (NYSE: CAT) and Boeing (NYSE: BA).
9. Standard & Poor's made some rather startling comments on the U.K banking system, saying they no longer classify it as among the most stable and low-risk banking systems globally. The firm is taking this view due to the weak economic environment, the reputational damage, and high dependence on state-support. S&P ranked the U.K. banking system at 3, in a scale that range from 1 as the strongest and 10 as the weakest.
10. Sales of previously occupied homes fell farther in December than in any month in more than 40 years, affected by the deadline for the first-time home buyer tax credit being extended by lawmakers. December sales fell 16.7 percent, well ahead of the economist estimate of 10 percent, to a seasonally adjusted annual rate of 5.45 million. The rate of 6.54 million in November was unchanged according to the report from the National Association of Realtors on Monday. Still, the XHB (NYSE: XHB) closed this week's trading session up about 1%.
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