Top 10 News Items 12/8-12/12: Madoff Shocks the Investment World; House Turns Down Auto Bailout Bill; Large Scale Layoffs Continue

December 12, 2008 5:09 PM EST

This is a recap of the top news items this week on Wall Street:

1. A well-trust Wall Street veteran, Bernard Madoff, was arrested Thursday by the FBI for running "a giant Ponzi scheme". According to SEC filings, Madoff admitted to two high level employees that he was "finished" and that his entire business was a fraud. Madoff estimated that losses from the fraud totaled at least $50 billion. Here is the full report.

2. After passing the U.S. House, the $14 billion emergency auto bailout bill failed in the Senate. The Bush Administration indicated they would step in with help, possibly by using TARP money. Shares of GM (NYSE: GM) finished the weak down about 3%, closing at $3.94, while Ford (NYSE: F) finished this week's trading up about 11% to $3.04.

3. Following reports from AT&T (NYSE: T), Viacom (NYSE: VIA), DuPont (NYSE: DD) and Cummins (NYSE: CMI) last week, job cut announcements continued this week. Bank of America (NYSE: BAC) said it will cut 30,000-35,000 jobs over the next 3-years, Rio Tinto (NYSE: RTP) is cutting 14K jobs, Stanley Works (NYSE: SWK) is cutting 2K, Danaher (NYSE: DHR) is cutting 1.7K jobs and 3M (NYSE: MMM) cutting 1.8K jobs. To see a list of all the layoffs reported this year, visit StreetInsider.com's Layoffs entity page.

4. Earnings warnings from companies were in style this week, with all the company's citing the deteriorating economy. Some major warnings included: Waters Corp (NYSE: WAT), Baidu.com (Nasdaq: BIDU), Stanley Works (NYSE: SWK), CIENA (Nasdaq: CIEN), Eastman Kodak (NYSE: EK), Electronic Arts
(Nasdaq: ERTS), Agilent (NYSE: A), Nucor (NYSE: NUE), Danaher (NYSE: DHR), Texas Instruments (NYSE: TXN), FedEx (NYSE: FDX), Con-Way (NYSE: CNW), Illinois Tool Works (NYSE: ITW), 3M (NYSE: MMM). Click each companies name to see full reports.

5. GMAC failed to meet conditions to become a bank holding company. If the grant would have been approved, GMAC would have been eligible to receive money from the Treasury's capital repurchase program.

6. Continuing to outperform in this hostile environment, McDonald's announced Monday that its worldwide same store sales rose 7.7% during the month of November. The strong month was lead by sales in Asia/Pacific, Middle East and Africa which came in at up 13.2%. Despite the positive news, shares of McDonald's finished down about 3% this week.

7. Tribune Company (NYSE: TXA) announced that it has voluntarily filed for Chapter 11 bankruptcy protection. The company said it will continue to operate its media businesses during the restructuring process, including publishing its newspapers and running its television stations and interactive properties without interruption, and that it has sufficient cash to do so.

8. Both Morgan Stanley's (NYSE: MS) John Mack and Merrill Lynch's (NYSE: MER) John Thain said they would not receive bonus compensation, as well as several other c-level execs from each embattled financial company.

9. According to new data from the Comptroller of the Currency, more than half of loans modified in the first quarter of 2008 fell delinquent within six months. Comptroller John C. Dugan said, "After three months, nearly 36 percent of the borrowers had re-defaulted by being more than 30 days past due. After six months, the rate was nearly 53 percent, and after eight months, 58 percent."

10. The dollar showed signs of weakening this week as investors are begin the see the effects the governments actions could have on the money supply. Gold rose as the flight-to-quality trade came back into play this week. The SPDR Gold Trust ETF (NYSE: GLD) rose by more than 8%. The GLD finished this week at its highest levels since mid-October.

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• Citi
• Morgan Stanley
• Merrill Lynch
• Banc of America
• John A. Thain
• StreetInsider.com Top 10 News Items for the Week
• Bankruptcy
• Layoffs
• Bernard Madoff
• GMAC

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