Top 10 News Items 5/17-5/21: Turmoil In Europe Crush the Euro, Leading to Protesting; Senators Approve Sweeping FinReg; Details of 'Flash Crash' Suggest It Was Pure Fear
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Here is a recap of the top new items from this week on Wall Street:
1. Concerns with the European debt crisis lead to social unrest in several countries this week, intensifying investor fears that problems within the region could lead to yet another leg lower in the financial markets. Germany imposed a ban on short-selling, an event which quickly escalated to rumors that the entire EU could soon be under the hood of similar trading restrictions. In addition to protests in Greece, unhappy citizens in both Spain and Slovenia demonstrated in front of their respective government officials. Trader worries peaked on Thursday of this week as turmoil in overseas markets spilled over onto the trading floors in the US. The euro was whacked (but rebounded on Friday) and the Dow plunged about 370 points on Thursday and the S&P pushed below "flash crash" levels early on Friday's trading session, however stocks bounced to finish this week.
2. Senators approved the sweeping overhaul of the financial system on Thursday night, following months of heated debate over what likely could prove to be the most important legislation to hit Wall Street since the Great Depression. The 59-39 vote was the next step to giving President Barack Obama his second major legislative victory following the healthcare reform bill passed earlier this year. One of the biggest differences between the House and Senate bills is that the Senate proposal would make big banks spin off some of their derivative business into separate subsidiaries. These derivative units are among the most lucrative for banks. Financial stocks sold-off this week as traders were selling into the anticipated vote, however, saw a modest relief rally on Friday as the bill will move forward.
3. Further details on the appropriately named "flash crash" came in this week, and much to the media's dismay, nothing has indicated that it was the result of a unfortunately placed "fat finger." Bulls will be happy, however, as Friday's gap lower at the open pushed the broad indices below levels hit on that fateful Thursday, only to bounce over these levels later in the session.
4. Jobless claims for the last week came in at 471,000, a 25,000 jump from the prior week and about 31,000 higher than the 440,000 economists had been looking for. This week's data marked the first increase in five weeks but also was the largest surge since 40,000 new claims were seen in February.
5. Crude oil fell sharply this week, falling to as low as $65 per barrel on Thursday; crude bounced quickly at the end of the week, however and closed just above $70. Continuing concerns related to the massive oil spill in the Gulf of Mexico weighed on the commodity.
6. GM reported its first Q1 profit since 2007 this week: saw a first quarter profit of $865 million, or $1.66 per share. Last year the company lost nearly $6 billion. Net sales at GM rose 40% to $31.5 billion, on the back of the strong rebound in vehicle demand.
7. Elsewhere on the earnings front: Hewlett-Packard (NYSE: HPQ), Dell (Nasdaq: DELL), Deere (NYSE: DE), salesforce.com (NYSE: CRM).
8. A plethora of retail earnings were released this week including: Lowes (NYSE: LOW), Home Depot (NYSE: HD), Wal-Mart (NYSE: WMT), TJX (NYSE: TJX), BJ's Wholesale (NYSE: BJ), Target (NYSE: TGT), Children's Place (Nasdaq: PLCE), Staples (Nasdaq: SPLS) and Gap (NYSE: GPS).
9. Hedge funds released their 13F's for the last quarter this week, actually showing a rather quiet period. Not many big individual stock buys/sells were seen, however, most fund managers lightened up their exposure to banks and just generally got more defensive. Among some of the notables: Warren Buffett, David Einhorn's Greenlight Capital, Bill Ackman's Pershing Square and Eddie Lampert's RBS Partners.
10. It was a busy week on the M&A front: OSI Pharma (Nasdaq: OSIP) agreed to a sweetened $57.50/share bid from Astellas, GLG Partners (NYSE: GLG) was bought for $4.50/share by Man Group, Psychiatric Solutions (Nasdaq: PSYS) was bought by Universal Health (NYSE: UHS) for $33.75/share, Pactiv (NYSE: PTV) is in talks for a massive deal with Apollo, Double-Take (Nasdaq: DBTK) was offered $10.55/share and Virtual Radiologic (Nasdaq: VRAD) was offered $17.25/share.
1. Concerns with the European debt crisis lead to social unrest in several countries this week, intensifying investor fears that problems within the region could lead to yet another leg lower in the financial markets. Germany imposed a ban on short-selling, an event which quickly escalated to rumors that the entire EU could soon be under the hood of similar trading restrictions. In addition to protests in Greece, unhappy citizens in both Spain and Slovenia demonstrated in front of their respective government officials. Trader worries peaked on Thursday of this week as turmoil in overseas markets spilled over onto the trading floors in the US. The euro was whacked (but rebounded on Friday) and the Dow plunged about 370 points on Thursday and the S&P pushed below "flash crash" levels early on Friday's trading session, however stocks bounced to finish this week.
2. Senators approved the sweeping overhaul of the financial system on Thursday night, following months of heated debate over what likely could prove to be the most important legislation to hit Wall Street since the Great Depression. The 59-39 vote was the next step to giving President Barack Obama his second major legislative victory following the healthcare reform bill passed earlier this year. One of the biggest differences between the House and Senate bills is that the Senate proposal would make big banks spin off some of their derivative business into separate subsidiaries. These derivative units are among the most lucrative for banks. Financial stocks sold-off this week as traders were selling into the anticipated vote, however, saw a modest relief rally on Friday as the bill will move forward.
3. Further details on the appropriately named "flash crash" came in this week, and much to the media's dismay, nothing has indicated that it was the result of a unfortunately placed "fat finger." Bulls will be happy, however, as Friday's gap lower at the open pushed the broad indices below levels hit on that fateful Thursday, only to bounce over these levels later in the session.
4. Jobless claims for the last week came in at 471,000, a 25,000 jump from the prior week and about 31,000 higher than the 440,000 economists had been looking for. This week's data marked the first increase in five weeks but also was the largest surge since 40,000 new claims were seen in February.
5. Crude oil fell sharply this week, falling to as low as $65 per barrel on Thursday; crude bounced quickly at the end of the week, however and closed just above $70. Continuing concerns related to the massive oil spill in the Gulf of Mexico weighed on the commodity.
6. GM reported its first Q1 profit since 2007 this week: saw a first quarter profit of $865 million, or $1.66 per share. Last year the company lost nearly $6 billion. Net sales at GM rose 40% to $31.5 billion, on the back of the strong rebound in vehicle demand.
7. Elsewhere on the earnings front: Hewlett-Packard (NYSE: HPQ), Dell (Nasdaq: DELL), Deere (NYSE: DE), salesforce.com (NYSE: CRM).
8. A plethora of retail earnings were released this week including: Lowes (NYSE: LOW), Home Depot (NYSE: HD), Wal-Mart (NYSE: WMT), TJX (NYSE: TJX), BJ's Wholesale (NYSE: BJ), Target (NYSE: TGT), Children's Place (Nasdaq: PLCE), Staples (Nasdaq: SPLS) and Gap (NYSE: GPS).
9. Hedge funds released their 13F's for the last quarter this week, actually showing a rather quiet period. Not many big individual stock buys/sells were seen, however, most fund managers lightened up their exposure to banks and just generally got more defensive. Among some of the notables: Warren Buffett, David Einhorn's Greenlight Capital, Bill Ackman's Pershing Square and Eddie Lampert's RBS Partners.
10. It was a busy week on the M&A front: OSI Pharma (Nasdaq: OSIP) agreed to a sweetened $57.50/share bid from Astellas, GLG Partners (NYSE: GLG) was bought for $4.50/share by Man Group, Psychiatric Solutions (Nasdaq: PSYS) was bought by Universal Health (NYSE: UHS) for $33.75/share, Pactiv (NYSE: PTV) is in talks for a massive deal with Apollo, Double-Take (Nasdaq: DBTK) was offered $10.55/share and Virtual Radiologic (Nasdaq: VRAD) was offered $17.25/share.
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Warren Buffett, Edward Lampert, RBS Partners, ESL Investments, William Ackman, UBS, Pershing Square Capital, Greenlight Capital, David Einhorn, Citi, Standard & Poor's, GLG Partners, StreetInsider.com Top 10 News Items for the Week, Hedge Funds, Crude Oil, Man Group, Barack ObamaSign up for StreetInsider Free!
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