Top 10 News Items 2/2-2/6: Geithner to Release Bailout Plan Monday; Unemployment Rate Jumps to 7.6%; BofA Reverses on Insider Buys

February 6, 2009 4:32 PM EST

Here is a recap of the top news of the week on Wall Street:

1. Following weeks of speculation on what the next bank bailout package will offer, Treasury Secretary Tim Geithner is expected to unveil his bailout plan on Monday, February 9. Following the spotty success of the bailouts from predecessor Henry Paulson, the market is hoping Geithner's plan will help restore liquidity and confidence in the financial system. After initially starting off this week lower, stocks rallied in anticipation of the plan.

2. Non-farm payrolls for the month of January came in at 598,000, which was slightly higher than the Street's estimate of 540,000. The unemployment rate rose to 7.6%, yet the markets rallied as these numbers, while definitely very scary, were not catastrophically bad as many analysts were expecting.

3. With a rapidly sliding stock price, and concerns about the viability of the Merrill Lynch acquisition, talks of nationalizing Bank of America (NYSE: BAC) were abundant this week. The stock fell nearly 30% from Monday to Wednesday, at which time a number of insider buys were disclosed, including the CEO Ken Lewis. Since the initial reports, insiders at BofA disclosed several more purchases on Friday. The stock rebounded by more than 30% following the news.

4. On Wednesday, President Obama confirmed that he would place limits on executive compensation for those companies receiving government assistance. The restrictions will include a $500,000 annual pay cap for senior executives at companies receiving "exceptional assistance". Any additional compensation will have to come in the form of restricted stock that won't vest until the government is paid back with interest. In addition, executive compensation structure and strategy must be full disclosed and subject to a "say on pay" shareholder resolution. There is also a required provision to "clawback" bonuses to top executives engaging in deceptive practices. The plan will also increase the ban on "golden parachutes" and will require Board of Directors' adoption of company policy related to approval of luxury expenditures like aviation services, office and facility renovations, entertainment and holiday parties, and conferences and events. Companies that likely fall under the "exceptional assistance" may include: AIG (NYSE: AIG), Citigroup (NYSE: C) and Bank of America, according to sources.

5. Auto sales for the month of January were released this week and investors were once again met with a barrage of massive double digit declines. GM (NYSE: GM) reported a 49% decline, while Ford (NYSE: F) saw a 42.1% decline. Despite the falling monthly sales, shares of GM and Ford finished the week only modestly lower.

6. Midway through the week, media reports claimed that the economic stimulus plan had hit snags causing discussions to stall. Sources said regulators were concerned with possible earmarks included in the package. Obama responded by giving several heartfelt speeches encouraging American citizens and politicians alike to push forward.

7. The two largest credit card processors, Visa (NYSE: V) and MasterCard (NYSE: MA), reported their Q1 and Q4 earnings, respectively, handily beating Wall Street's expectations. Shares of Visa surged nearly 13% on the news, while shares of MasterCard rose 16% by the end of the week.

8. Elsewhere on the earnings front: Dow Chemical (NYSE: DOW) reported a Q4 loss, as did Motorola (NYSE: MOT). Merck (NYSE: MRK), Cummins (NYSE: CMI), UPS (NYSE: UPS), Disney (NYSE: DIS), Time Warner (NYSE: TWX), Cisco (Nasdaq: CSCO), and Philip Morris International (NYSE: PM) also reported.

9. Continued concerns about the credit worthiness and dividend of General Electric (NYSE: GE) sent the stock about 8% lower this week. Calming investor concerns, in the near-term atleast, GE declared its quarterly dividend of $0.31 on Friday.

10. The original Madoff whistle blower, Harry Markopolos, who informed the SEC several years ago that something fishy was going on at Madoff's firm, testified in front of Congress this week. Markopolos was unrelenting in his remarks related to the incompetence of the SEC while Madoff was managing money. As Madoff has now put Ponzi to shame in terms of con-jobs, it will be very interesting to see how investigations go.

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• Henry Paulson
• Citi
• Merrill Lynch
• Banc of America
• Dividend
• StreetInsider.com Top 10 News Items for the Week
• Bernard Madoff
• Timothy Geithner

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