Top 10 News Items 8/15-8/19: HP Gets Slammed as Turnaround Hits a Major Snag; Eurobanks in Focus; Fears of 'Double-Dip Recession' Abound
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Here is a recap of the top news items from this week on Wall Street:
1. Shares of HP (NYSE: HPQ) plummeted about 25 percent this week as investors are beginning to speculate on just how long it will take to turnaround the company. Rumors of a spinoff of HP's PC business were confirmed on Thursday, as well as a takeover of London-based enterprise software company Autonomy. The company reported Q3 EPS of $1.10 on sales of $31.2B and said it expects FY11 EPS of $4.82-$4.86, down from prior guidance of about $5.00.
2. The Euro banking group was in focus this week as the WSJ further exacerbated concerns Thursday following a front-page story suggesting the U.S. Federal Reserve is very concerned about European banks which operate in the U.S. The Fed had recent meetings with officials from the European banks to discuss if the region had ample liquidity. The Fed seeks to avoid a repeat of 2008, which this time could lead to a spilling over to the U.S. banking sector.
3. Fears of a double-dip recession are being heard more and more on the Street each week. This week, a number of analyst firms including Morgan Stanley lowered growth forecasts. Morgan Stanley lowered its global growth forecast and said the U.S. and Europe are "dangerously close to recession." The firm's 2011 forecast for global growth fell from 4.2 percent to 3.9 percent. The 2012 estimate was cut from 4.5 percent to 3.8 percent
4. Motorola Mobility (NYSE: MMI) shares surged more than 55 percent on Monday of this week after news Google (Nasdaq: GOOG) is looking to acquire the company in a $12.5 billion deal. Google shares fell nearly 14 percent on the deal.
5. The Philly Fed index for the month of August came in at -30.7, down from a reading of +3.2 in July and sharply below the 2.0 sought by economists. The Dow Jones Average fell almost 160 points just after the news hit wires.
6. Gold marked a new all-time high at $1,874.40 per ounce after settling around $1,740 at the end of last week. The metal settled around $1,851 this week. The SPDR Gold Trust ETF (NYSE: GLD) was up nearly 6 percent as traders ran for cover.
7. The Producer Price Index for the month of July rose 0.2 percent this week, while the Consumer Price Index surged 0.5 percent. Both were hotter than where the Street was expecting: a 0.1 percent rise for PPI and a 0.2 percent rise for CPI.
8. The 13F's for Wall Street's most prominent hedge funds were released this week. Among the highlights: Warren Buffett's Berkshire, Bruce Berkowitz's Fairholme, David Einhorn's Greenlight Capital and Carl Icahn.
9. On the IPO front, Tudou (Nasdaq: TUDO), the so-called new "YouTube of China," flopped. After pricing at $29 and opening just over $25, shares closed this week's session at $19.24.
10. Homebuilders slumped to finish this week's session as existing home sales for July missed economist estimates. Existing home sales totaled 4.67 million during the month, worse than the 4.9 million the Street was looking for a down from an upwardly revised reading of 4.84 million for the month of June. The XHB (NYSE: XHB) fell 6 percent on Thursday and another 2 percent on Friday.
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1. Shares of HP (NYSE: HPQ) plummeted about 25 percent this week as investors are beginning to speculate on just how long it will take to turnaround the company. Rumors of a spinoff of HP's PC business were confirmed on Thursday, as well as a takeover of London-based enterprise software company Autonomy. The company reported Q3 EPS of $1.10 on sales of $31.2B and said it expects FY11 EPS of $4.82-$4.86, down from prior guidance of about $5.00.
2. The Euro banking group was in focus this week as the WSJ further exacerbated concerns Thursday following a front-page story suggesting the U.S. Federal Reserve is very concerned about European banks which operate in the U.S. The Fed had recent meetings with officials from the European banks to discuss if the region had ample liquidity. The Fed seeks to avoid a repeat of 2008, which this time could lead to a spilling over to the U.S. banking sector.
3. Fears of a double-dip recession are being heard more and more on the Street each week. This week, a number of analyst firms including Morgan Stanley lowered growth forecasts. Morgan Stanley lowered its global growth forecast and said the U.S. and Europe are "dangerously close to recession." The firm's 2011 forecast for global growth fell from 4.2 percent to 3.9 percent. The 2012 estimate was cut from 4.5 percent to 3.8 percent
4. Motorola Mobility (NYSE: MMI) shares surged more than 55 percent on Monday of this week after news Google (Nasdaq: GOOG) is looking to acquire the company in a $12.5 billion deal. Google shares fell nearly 14 percent on the deal.
5. The Philly Fed index for the month of August came in at -30.7, down from a reading of +3.2 in July and sharply below the 2.0 sought by economists. The Dow Jones Average fell almost 160 points just after the news hit wires.
6. Gold marked a new all-time high at $1,874.40 per ounce after settling around $1,740 at the end of last week. The metal settled around $1,851 this week. The SPDR Gold Trust ETF (NYSE: GLD) was up nearly 6 percent as traders ran for cover.
7. The Producer Price Index for the month of July rose 0.2 percent this week, while the Consumer Price Index surged 0.5 percent. Both were hotter than where the Street was expecting: a 0.1 percent rise for PPI and a 0.2 percent rise for CPI.
8. The 13F's for Wall Street's most prominent hedge funds were released this week. Among the highlights: Warren Buffett's Berkshire, Bruce Berkowitz's Fairholme, David Einhorn's Greenlight Capital and Carl Icahn.
9. On the IPO front, Tudou (Nasdaq: TUDO), the so-called new "YouTube of China," flopped. After pricing at $29 and opening just over $25, shares closed this week's session at $19.24.
10. Homebuilders slumped to finish this week's session as existing home sales for July missed economist estimates. Existing home sales totaled 4.67 million during the month, worse than the 4.9 million the Street was looking for a down from an upwardly revised reading of 4.84 million for the month of June. The XHB (NYSE: XHB) fell 6 percent on Thursday and another 2 percent on Friday.
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Carl Icahn, Warren Buffett, Existing-Home Sales, Greenlight Capital, David Einhorn, Citi, Morgan Stanley, Jefferies & Co, Bank of America, StreetInsider.com Top 10 News Items for the Week, Hedge Funds, Bruce Berkowitz, PPI, Philadelphia Fed Index, Motorola Mobility/Google
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