Top 10 News Items 5/23-5/27: Eurozone Debt Fears Remain; Medco Tumbles as CVS Steals Blue Cross/Blue Shield Contract; California Pizza Kitchen Gets an Offer
Here is a recap of the top news items from the last week on Wall Street:
1. U.S. stocks followed world stocks lower to begin this week's session as European debt issues intensified with a potential Greece default in the spotlight and new worries in Italy after a warning about a debt downgrade. Later in the week, Belgian-French financial institution Dexia N.V./S.A. said it will take a $5.1 billion charge related to the sale of mostly US mortgage-backed securities, adding to these fears. The Dow Jones closed down about 0.5 percent from last Friday's close.
2. Medco Health Solutions Inc. (NYSE: MHS) shares fell more than 9 percent on Friday following news from the morning the company lost the Federal Employee Program mail order and specialty pharmacy contract to rival CVS Caremark (NYSE: CVS). The contract covers more than 5 million federal employees, retirees and dependents and generated nearly $3 billion in annual net revenues for MedcoHealth. This represents about 4 percent of this year's estimated revenue for the company. Shares of CVS rose modestly on the news.
3. Shares of California Pizza Kitchen (Nasdaq: CPKI) jumped more than 10 percent on Wednesday following news Golden Gate Capital and CPKI have entered into a definitive agreement under which an affiliate of Golden Gate Capital will acquire the Company for $18.50 per share in cash, or ~$470 million. Later during the session, we heard holder Clinton Group may make a self-tender above $19.50 per share, however the stock stayed below the $18.50 level to close this week's session.
4. On the housing front, data on new home sales Tuesday came in better than expected while pending home sales data on Friday was far worse than expected. New home sales rose 7.3 percent to 323,000. Pending home sales for the month of April fell 11.6 percent and nearly 27 percent from the same month last year. The XHB (NYSE: XHB) closed this week's session 1.5 percent higher.
5. The Street got its second reading on first-quarter GDP growth Thursday morning: unchanged from the initial 1.8 percent increase reported on April 28th. Economists had been expecting an upwardly revised reading of 2.2 percent. Final gross domestic product for the fourth quarter of last year came in at up 3.1 percent.
6. The IPO for Russia's most popular search engine Yandex N.V. (Nasdaq: YNDX) lit up Wall Street Tuesday. After pricing at $25 per share, the stock opened at $35 and climbed to as high as $42 before paring gains. Shares closed at $34.49, down slightly from the opening price but up almost 40 percent from the pricing.
7. Earnings are still trickling in; this week we had: Campbell Soup (NYSE: CPB), Medtronic (NYSE: MDT), Polo Ralph Lauren (NYSE: RL), NetApp (Nasdaq: NTAP) and Guess? (NYSE: GES)
8. Shares of El Paso (NYSE: EP) saw upside this week following news the company is pursuing the separation into two publicly-traded companies by year-end of 2011. Following the completion, El Paso Corp. would be comprised of El Paso's Pipeline Group, its Midstream Group, and its general and limited partner interests in El Paso Pipeline Partners, LP (NYSE: EPB).
9. After more than doubling from its pricing last week, shares of LinkedIn (Nasdaq: LNKD) fell more than 4 percent as a number of pundits and analysts suggested the stock could be overvalued. Check out our Analyst Ratings page to track all the analyst action on shares of LinkedIn.
10. Calls from hedge fund managers speaking at the Ira Sohn Conference in New York City this week caught headlines. Some highlights were: Bill Ackman disclosed a position in Family Dollar (NYSE: FDO) and David Einhorn called out Microsoft's (Nasdaq: MSFT) Steve Ballmer, but said he still likes the stock.
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1. U.S. stocks followed world stocks lower to begin this week's session as European debt issues intensified with a potential Greece default in the spotlight and new worries in Italy after a warning about a debt downgrade. Later in the week, Belgian-French financial institution Dexia N.V./S.A. said it will take a $5.1 billion charge related to the sale of mostly US mortgage-backed securities, adding to these fears. The Dow Jones closed down about 0.5 percent from last Friday's close.
2. Medco Health Solutions Inc. (NYSE: MHS) shares fell more than 9 percent on Friday following news from the morning the company lost the Federal Employee Program mail order and specialty pharmacy contract to rival CVS Caremark (NYSE: CVS). The contract covers more than 5 million federal employees, retirees and dependents and generated nearly $3 billion in annual net revenues for MedcoHealth. This represents about 4 percent of this year's estimated revenue for the company. Shares of CVS rose modestly on the news.
3. Shares of California Pizza Kitchen (Nasdaq: CPKI) jumped more than 10 percent on Wednesday following news Golden Gate Capital and CPKI have entered into a definitive agreement under which an affiliate of Golden Gate Capital will acquire the Company for $18.50 per share in cash, or ~$470 million. Later during the session, we heard holder Clinton Group may make a self-tender above $19.50 per share, however the stock stayed below the $18.50 level to close this week's session.
4. On the housing front, data on new home sales Tuesday came in better than expected while pending home sales data on Friday was far worse than expected. New home sales rose 7.3 percent to 323,000. Pending home sales for the month of April fell 11.6 percent and nearly 27 percent from the same month last year. The XHB (NYSE: XHB) closed this week's session 1.5 percent higher.
5. The Street got its second reading on first-quarter GDP growth Thursday morning: unchanged from the initial 1.8 percent increase reported on April 28th. Economists had been expecting an upwardly revised reading of 2.2 percent. Final gross domestic product for the fourth quarter of last year came in at up 3.1 percent.
6. The IPO for Russia's most popular search engine Yandex N.V. (Nasdaq: YNDX) lit up Wall Street Tuesday. After pricing at $25 per share, the stock opened at $35 and climbed to as high as $42 before paring gains. Shares closed at $34.49, down slightly from the opening price but up almost 40 percent from the pricing.
7. Earnings are still trickling in; this week we had: Campbell Soup (NYSE: CPB), Medtronic (NYSE: MDT), Polo Ralph Lauren (NYSE: RL), NetApp (Nasdaq: NTAP) and Guess? (NYSE: GES)
8. Shares of El Paso (NYSE: EP) saw upside this week following news the company is pursuing the separation into two publicly-traded companies by year-end of 2011. Following the completion, El Paso Corp. would be comprised of El Paso's Pipeline Group, its Midstream Group, and its general and limited partner interests in El Paso Pipeline Partners, LP (NYSE: EPB).
9. After more than doubling from its pricing last week, shares of LinkedIn (Nasdaq: LNKD) fell more than 4 percent as a number of pundits and analysts suggested the stock could be overvalued. Check out our Analyst Ratings page to track all the analyst action on shares of LinkedIn.
10. Calls from hedge fund managers speaking at the Ira Sohn Conference in New York City this week caught headlines. Some highlights were: Bill Ackman disclosed a position in Family Dollar (NYSE: FDO) and David Einhorn called out Microsoft's (Nasdaq: MSFT) Steve Ballmer, but said he still likes the stock.
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