Top 10 News Items 4/5-4/9: Economic Data Points Mixed This Week, Airline Stocks Rise as UAL/US Airways in Merger Talks, Retail Sales in March Rise a Record Amount
Here is a recap of the top news items from this week on Wall Street:
1. Numerous mixed economic data points gave investors an inconsistent view of the current financial environment this week. To start the week, pending home sales for the month of February came in much better than expected: up 8.2% vs. the consensus of flat. Also ISM non-manufacturing data showed a rise to 55.4. In the retail sector, same store sales for last month rose the most in nearly a decade. On the bearish side of things, consumer credit showed an extremely sharp decline and initial jobless claims rose to 460,000.
2. Airline stocks finished this week with a strong move to the upside as the WSJ reported (on Thursday) that UAL Corp. (Nasdaq: UAUA) and US Airways (NYSE: LCC) are in merger talks. Shares of UAL jumped nearly 8% following the news, and shares of US Airways rose 10% on Thursday, but fell 3% on Friday.
3. Numerous pundits argued that "the consumer is back!" as retail sales for the month of March rose a record higher 9.1%. Some highlights: Target (NYSE: TGT) up 10.3%, JCPenney (NYSE: JCP) up 5.4%, Kohl's (NYSE: KSS) up 22.5%, Aeropostale (NYSE: ARO) up 19%, TJX (NYSE: TJX) up 12% and Gap (NYSE: GPS) up 11%.
4. Shares of Massey Energy (NYSE: MEE) tumbled almost 15% as a tragic explosion in its West Virginia Upper Big Branch Mine claimed at least 25 lives this week. Rescuers are still trying to save four men who are trapped in the Mine.
5. Apple (Nasdaq: AAPL) shares continued hitting new 52-week highs this week as the company had several exciting developments: the weekend release of its long-fabled iPad and the unveiling of its new iPhone 4.0 OS. The company sold over 450,000 iPads and later in the week, announced that the iPhone will now be able to MULTITASK!
6. The lone dissenter for several months now, the Kansas City Fed's Thomas Hoenig urged that the Fed should remove the "extended period" language and start the process of raising the federal funds rate target toward 1%, versus its current 0%-0.25% range. Hoeing says a move to 1% is just a continuation of the Feds strategy to remove measures that were put in place during the crisis. A 1% federal funds rate is still "highly accommodative," Hoenig argues.
7. Testifying infront of the Financial Crisis Inquiry Commission, The senior advisor to Citigroup (NYSE: C) at the time of the firm’s subprime debacle, Robert Rubin, and former CEO Chuck Prince said Thursday that they did not find out until it was too late that the bank had $43 billion in high-risk securities among its assets. Former Fed Chairman Alan Greenspan was also grilled on his role in the financial meltdown.
8. Private equity fanatics perked up this week as we heard reports that KKR & Co., Bain Capital LLC, Bank of America Corp. (NYSE: BAC) and Tennessee's Frist family are preparing to interview underwriters with the intention of preparing a massive IPO for hospital giant HCA Inc. We have heard that the IPO could be between $3 and $4 billion.
9. Sources suggested this week that the Chinese government is getting set to announce a revision of its currency policy soon that will allow for greater variation and a jump in the currency's value against the dollar. The central bank in China has apparently won its argument with the nation's government to create more flexibility in the Chinese currency, but the sources cited in the report said that the announcement could be delayed if a last-minute problem arises. The shift will allow the currency to jump 2 percent overnight against the dollar and then open it up for trading at a wider daily range. This would cause a trend of strengthening against the dollar.
10. Casino & Gaming stocks had a very strong week as the State of Nevada's Gaming Control Board issued solid gaming wins for the Vegas strip. Las Vegas Strip total gaming win rose a whopping 32.88% from $427.4 million last February to $567.98 million this February. Shares of Las Vegas Sands (NYSE: LVS) rose more than 12%, shares of MGM Mirage (NYSE: MGM) jumped 20% and Wynn Resorts (Nasdaq: WYNN) rose about 11%.
1. Numerous mixed economic data points gave investors an inconsistent view of the current financial environment this week. To start the week, pending home sales for the month of February came in much better than expected: up 8.2% vs. the consensus of flat. Also ISM non-manufacturing data showed a rise to 55.4. In the retail sector, same store sales for last month rose the most in nearly a decade. On the bearish side of things, consumer credit showed an extremely sharp decline and initial jobless claims rose to 460,000.
2. Airline stocks finished this week with a strong move to the upside as the WSJ reported (on Thursday) that UAL Corp. (Nasdaq: UAUA) and US Airways (NYSE: LCC) are in merger talks. Shares of UAL jumped nearly 8% following the news, and shares of US Airways rose 10% on Thursday, but fell 3% on Friday.
3. Numerous pundits argued that "the consumer is back!" as retail sales for the month of March rose a record higher 9.1%. Some highlights: Target (NYSE: TGT) up 10.3%, JCPenney (NYSE: JCP) up 5.4%, Kohl's (NYSE: KSS) up 22.5%, Aeropostale (NYSE: ARO) up 19%, TJX (NYSE: TJX) up 12% and Gap (NYSE: GPS) up 11%.
4. Shares of Massey Energy (NYSE: MEE) tumbled almost 15% as a tragic explosion in its West Virginia Upper Big Branch Mine claimed at least 25 lives this week. Rescuers are still trying to save four men who are trapped in the Mine.
5. Apple (Nasdaq: AAPL) shares continued hitting new 52-week highs this week as the company had several exciting developments: the weekend release of its long-fabled iPad and the unveiling of its new iPhone 4.0 OS. The company sold over 450,000 iPads and later in the week, announced that the iPhone will now be able to MULTITASK!
6. The lone dissenter for several months now, the Kansas City Fed's Thomas Hoenig urged that the Fed should remove the "extended period" language and start the process of raising the federal funds rate target toward 1%, versus its current 0%-0.25% range. Hoeing says a move to 1% is just a continuation of the Feds strategy to remove measures that were put in place during the crisis. A 1% federal funds rate is still "highly accommodative," Hoenig argues.
7. Testifying infront of the Financial Crisis Inquiry Commission, The senior advisor to Citigroup (NYSE: C) at the time of the firm’s subprime debacle, Robert Rubin, and former CEO Chuck Prince said Thursday that they did not find out until it was too late that the bank had $43 billion in high-risk securities among its assets. Former Fed Chairman Alan Greenspan was also grilled on his role in the financial meltdown.
8. Private equity fanatics perked up this week as we heard reports that KKR & Co., Bain Capital LLC, Bank of America Corp. (NYSE: BAC) and Tennessee's Frist family are preparing to interview underwriters with the intention of preparing a massive IPO for hospital giant HCA Inc. We have heard that the IPO could be between $3 and $4 billion.
9. Sources suggested this week that the Chinese government is getting set to announce a revision of its currency policy soon that will allow for greater variation and a jump in the currency's value against the dollar. The central bank in China has apparently won its argument with the nation's government to create more flexibility in the Chinese currency, but the sources cited in the report said that the announcement could be delayed if a last-minute problem arises. The shift will allow the currency to jump 2 percent overnight against the dollar and then open it up for trading at a wider daily range. This would cause a trend of strengthening against the dollar.
10. Casino & Gaming stocks had a very strong week as the State of Nevada's Gaming Control Board issued solid gaming wins for the Vegas strip. Las Vegas Strip total gaming win rose a whopping 32.88% from $427.4 million last February to $567.98 million this February. Shares of Las Vegas Sands (NYSE: LVS) rose more than 12%, shares of MGM Mirage (NYSE: MGM) jumped 20% and Wynn Resorts (Nasdaq: WYNN) rose about 11%.
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