Top 10 News Items 4/2-4/5: Stocks Fall as Fed May Be Closing the Window on Further QE; Jobs Data Mixed Ahead of Friday's Payroll Report; Bidder for Avon Approaches
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Here is a recap of the top news items from this week on Wall Street:
1. The stock market had its sharpest weekly decline of 2012 as the minutes from the latest FOMC meeting (on March 13th) showed "A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2 percent over the medium run." The language frightened traders as previous FOMC minutes showed more than a couple members signaled for further easing. The Fed's update left the Street pondering "What happens when the Fed is no longer supporting the markets?" The Dow Jones Industrial Average fell more than 230 points from highs just under 13,300 on Monday.
2. Ahead of Friday's always-important jobs report, data from ADP for March and weekly initial jobless claims gave traders a peak into the jobs market. ADP reported a 7,000 job decline from February to a gain of 209,000. Economists were expecting a gain of 206,000. Later in the week, jobless claims fell to a four-year low of 357,000. The Street was expecting a reading of 355,000. Payroll data for the nonfarm and private sectors will be released at 8:30am ET on Friday. Economists are expecting a 205,000 job gain in the nonfarm sector and a 215,000 gain in the private sector.
3. Shares of Avon (NYSE: AVP) rallied nearly 20 percent this week following news of Monday of a proposed $23.25 per share bid for the company from Coty Inc. The offer values the company at about $10 billion. Avon shares closed this week at $23.42.
4. Rumors from the New York Times late Thursday indicated Facebook (Nasdaq: FB) may have chosen Nasdaq (Nasdaq: NDAQ) for its IPO. While shares of NYSE Euronext (NYSE: NYX) ticked very modestly lower following the report, Nasdaq shares jumped and closed the session up more than 1 percent. The Facebook IPO is expected to debut sometime next month.
5. Automakers offered US sales data for the month of March on Tuesday of this week. While much of the media labeled the results as "strong," most figures came in worse than analysts had been expecting. Ford (NYSE: F) sales rose 5 percent, vs. a 5.5 percent expected rise. GM (NYSE: GM) said sales were up 11.8 percent during the month, far below the 17-19 percent estimate. Toyota (NYSE: TM) reported a 15.4 percent rise in auto sales. Notably, Toyota said US sales topped the 200,000 mark for the first time since 2008. Shares of both Ford and GM moved lower on this headline.
6. Groupon (Nasdaq: GRPN) shares plunged a whopping 17 percent on Monday of this week following news the company revised Q4 and FY11 financial statements related to "material weakness in its internal controls over its financial statement close process." While the company affirmed its FY12 sales view, investors were clearly freaked out. Shares fell another 7 percent to close the week at $14.18.
7. Shares of SanDisk (Nasdaq: SNDK) fell 11 percent on Wednesday as the company warned amid weaker pricing and demand. The company now expects Q1 and FY12 sales of $1.3-$1.35 billion and $6.2-$6.6 billion, respectively. The Street is expecting Q1 sales of $1.46 billion and FY12 sales of $6.65 billion.
8. Apple (Nasdaq: AAPL) stock received its first $1,000 price target this week. The call came from boutique firm Topeka Capital which set a $1,001 target on shares. The firm said "Apple fever is spreading like a wildfire around the world and we see no end in sight to this trend." Piper Jaffray's Gene Munster, often considered "the axe" on the stock, effectively did the "Look at me, look at me!" dance by putting out a research report just one day after with a sharply increased price target and a note which said the stock will hit $1,000 by 2014. Too bad, so sad, early-bird-gets-the-worm type situation, Gene.
9. US retailers issued monthly sales results on Thursday of this week. Market-research firm Retail Metrics said sales were up 3.9 percent over March, better than the 3.3 percent rise expected by the firm. Some highlights: Costco (Nasdaq: COST) up 6 percent, Limited (NYSE: LTD) up 8 percent, Wet Seal (Nasdaq: WTSLA) down 7.8 percent, Target (NYSE: TGT) up 7.3 percent with some raised guidance, Macy's (NYSE: M) up 7.3 percent, also with some raised guidance, a strong outlook and 10 percent rise from TJX (NYSE: TJX) and an 8 percent move higher for Gap (NYSE: GPS). Despite trading in positive territory for much of Thursday's session, the SPDR S&P Retail ETF (NYSE: XRT) closed down 0.5 percent.
10. Yahoo! (Nasdaq: YHOO) confirmed recent reports of a reduction of about 2,000 employees. The company said it will realize about $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge during Q2.
1. The stock market had its sharpest weekly decline of 2012 as the minutes from the latest FOMC meeting (on March 13th) showed "A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2 percent over the medium run." The language frightened traders as previous FOMC minutes showed more than a couple members signaled for further easing. The Fed's update left the Street pondering "What happens when the Fed is no longer supporting the markets?" The Dow Jones Industrial Average fell more than 230 points from highs just under 13,300 on Monday.
2. Ahead of Friday's always-important jobs report, data from ADP for March and weekly initial jobless claims gave traders a peak into the jobs market. ADP reported a 7,000 job decline from February to a gain of 209,000. Economists were expecting a gain of 206,000. Later in the week, jobless claims fell to a four-year low of 357,000. The Street was expecting a reading of 355,000. Payroll data for the nonfarm and private sectors will be released at 8:30am ET on Friday. Economists are expecting a 205,000 job gain in the nonfarm sector and a 215,000 gain in the private sector.
3. Shares of Avon (NYSE: AVP) rallied nearly 20 percent this week following news of Monday of a proposed $23.25 per share bid for the company from Coty Inc. The offer values the company at about $10 billion. Avon shares closed this week at $23.42.
4. Rumors from the New York Times late Thursday indicated Facebook (Nasdaq: FB) may have chosen Nasdaq (Nasdaq: NDAQ) for its IPO. While shares of NYSE Euronext (NYSE: NYX) ticked very modestly lower following the report, Nasdaq shares jumped and closed the session up more than 1 percent. The Facebook IPO is expected to debut sometime next month.
5. Automakers offered US sales data for the month of March on Tuesday of this week. While much of the media labeled the results as "strong," most figures came in worse than analysts had been expecting. Ford (NYSE: F) sales rose 5 percent, vs. a 5.5 percent expected rise. GM (NYSE: GM) said sales were up 11.8 percent during the month, far below the 17-19 percent estimate. Toyota (NYSE: TM) reported a 15.4 percent rise in auto sales. Notably, Toyota said US sales topped the 200,000 mark for the first time since 2008. Shares of both Ford and GM moved lower on this headline.
6. Groupon (Nasdaq: GRPN) shares plunged a whopping 17 percent on Monday of this week following news the company revised Q4 and FY11 financial statements related to "material weakness in its internal controls over its financial statement close process." While the company affirmed its FY12 sales view, investors were clearly freaked out. Shares fell another 7 percent to close the week at $14.18.
7. Shares of SanDisk (Nasdaq: SNDK) fell 11 percent on Wednesday as the company warned amid weaker pricing and demand. The company now expects Q1 and FY12 sales of $1.3-$1.35 billion and $6.2-$6.6 billion, respectively. The Street is expecting Q1 sales of $1.46 billion and FY12 sales of $6.65 billion.
8. Apple (Nasdaq: AAPL) stock received its first $1,000 price target this week. The call came from boutique firm Topeka Capital which set a $1,001 target on shares. The firm said "Apple fever is spreading like a wildfire around the world and we see no end in sight to this trend." Piper Jaffray's Gene Munster, often considered "the axe" on the stock, effectively did the "Look at me, look at me!" dance by putting out a research report just one day after with a sharply increased price target and a note which said the stock will hit $1,000 by 2014. Too bad, so sad, early-bird-gets-the-worm type situation, Gene.
9. US retailers issued monthly sales results on Thursday of this week. Market-research firm Retail Metrics said sales were up 3.9 percent over March, better than the 3.3 percent rise expected by the firm. Some highlights: Costco (Nasdaq: COST) up 6 percent, Limited (NYSE: LTD) up 8 percent, Wet Seal (Nasdaq: WTSLA) down 7.8 percent, Target (NYSE: TGT) up 7.3 percent with some raised guidance, Macy's (NYSE: M) up 7.3 percent, also with some raised guidance, a strong outlook and 10 percent rise from TJX (NYSE: TJX) and an 8 percent move higher for Gap (NYSE: GPS). Despite trading in positive territory for much of Thursday's session, the SPDR S&P Retail ETF (NYSE: XRT) closed down 0.5 percent.
10. Yahoo! (Nasdaq: YHOO) confirmed recent reports of a reduction of about 2,000 employees. The company said it will realize about $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge during Q2.
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