Top 10 News Items 8/18-8/22: Fannie, Freddie Concerns Continue; Lehman Could See a Bid; PPI Much Higher-Than-Expected; Oil Rebounds Only to Give Up Gains Friday

August 22, 2008 4:06 PM EDT

StreetInsider.com Top 10 News Items of the Week August 11 - August 15. This is a recap of this week's major news on Wall Street.

1. Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) had an extremely tough week on Wall Street - the stocks tumbled about 37% and 47%, respectively. The GSE's got off on the wrong foot this week as an article published in the weekend edition of Barron's suggested that it is growing increasingly likely that the Treasury will recapitalize Fannie and Freddie in the months ahead. The stocks continued to decline even as Fannie's CEO, Daniel Mudd appeared on National Public Radio saying that the Treasury has not helped the company and Fannie has not asked for help.

2. Negative sentiment on Lehman Brothers (NYSE: LEH) continued this week. On Monday and Tuesday, the stock sank nearly 20% as firms continued cutting estimates on the embattled bank. Shares of Lehman, however, bounced mid-week as rumors began being heard around Wall Street that several foreign banks were mulling taking a large stake in the company or even possibly buying it outright. Notably, Ladenburg Thalmann's Dick Bove upgraded the stock intraday on Thursday.

3. PPI comes in up 1.2%, versus the consensus of +0.6%. Core PPI comes in at +0.7%, versus the consensus of +0.2%. As prices haven't risen like this in a number of years, inflation concerns have once again been put on the front burner.

4. Oil rebounded this week after falling through much of July and August. Thursday, crude marked a near-term high at just over $122, but Friday sold-off, settling under $115.

5. Shares of Amylin Pharmaceuticals Inc. (Nasdaq: AMLN) fell more than 20% this week on news that the company's Byetta drug has been linked to six pancreatitis cases.

6. Hewlett-Packard (NYSE: HPQ) reported strong Q3, betting the Street's EPS estimate by 3c. The tech company also guided its Q4 slightly above the Street. As a result, shares of Hewlett-Packard gapped about 3.5% higher to open Wednesday's trading and have since continued higher, now up about 7% since the report.

7. The financials continued to have estimates cut this week. Tuesday, Goldman was out lowering earnings on JPMorgan (NYSE: JPM), Lehman, Merrill Lynch (NYSE: MER), Morgan Stanley (NYSE: MS) and Citigroup (NYSE: C). Wednesday, Bernstein released a note cutting estimates on Goldman (NYSE: GS), Lehman and Morgan Stanley, followed by Citi cutting estimates on similar stocks on Thursday. Finally, on Friday, Bank of America was also out reducing its expectations for the major banks.

8. On Thursday, Merrill Lynch, Goldman Sachs and Deutsche Bank (NYSE: DB) settled their auction-rate securities cases in New York. Merrill will pay a penalty of $125 million, NY Attorney General Andrew Cuomo says. Also, Goldman will pay a penalty of $22.5 million. Deutsche will pay a $15 million penalty and is expected to buy back $1 billion in securities. Merrill later came out announcing it reached a global settlement.

9. Suntech Power Holdings (NYSE: STP) reported very strong Q2 earnings on Tuesday after the close. The stock gapped about 7% higher on Wednesday and has since gained another ~$7.

10. Warren Buffett, appearing on CNBC's Squawk Box made several interesting comments: he said currently has no action on the greenback, which he has been shorting for quite some time. Also, Buffett told viewers that he raised his stake in one out of two of his financial stocks, either American Express (NYSE: AXP) or Wells Fargo (NYSE: WFC), but he would not specify.

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• Warren Buffett
• Deutsche Bank
• JPMorgan
• Goldman Sachs
• Citi
• Morgan Stanley
• Merrill Lynch
• Lehman Brothers
• Banc of America
• Barron's
• Richard Bove
• Ladenburg Thalmann Financial Services
• Crude Oil

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