Top 10 News Items 8/2-8/6: Jobs Friday Shakes Stocks; HP's Mark Hurd Unexpectedly Resigns; Goldman Sachs Rumor Mill Churning
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Here is a recap of the top news items from this week on Wall Street:
1. Most of this week's trading decisions were dominated by a looming jobs number on Friday. Ahead of the number, ADP employment and initial claims came in mixed with ADP indicating a better-than-expected figure and the weekly claims reading coming in slightly higher than economists had expected. Still, most traders weren't expecting the drastic decline in jobs that hit the Street on Friday morning: nonfarm payrolls came in at down 131,000, far worse than the down 65,000 economist estimate. Also importantly, private sector payrolls missed the Street with a reading of 71,000 but manufacturing payrolls beat the Street at 36,000. The unemployment rate was flat at 9.5%.
2. As a last-second entry to the Top 10 list, HP's (NYSE: HPQ) CEO Mark Hurd unexpectedly resigned from the company after the closing bell sounded on Wall Street. The resignation follows a probe of HP's conduct, but the company has said that the probe was not related to financials. In tandem with the exec resignation, HP also issued some preliminary numbers and raised its FY10 outlook. Sees Q3 sales of about $30.7 billion and adj-EPS of $1.08. The Street is looking for Q3 sales of $30.01 billion on EPS of $1.07. Sees Q4 sales of $32.5-$32.7 billion on EPS of $1.25-$1.27. The Street estimates are for sales of $32.6 billion on EPS of $1.26. Raises its FY10 EPS guidance from $4.45-$4.50 to $4.49-$4.51, vs. the consensus of $4.49. Sees sales of $125.3-$125.5 billion, vs. cons. of $124.6 billion.
3. Numerous rumors swirled around Goldman Sachs (NYSE: GS) this week as reports that the bank could spin-off its private equity or prop-trading operations quickly lead to rumors that the company could go private. A spokesperson from Goldman, however, later denied these rumors. Shares of GS closed this week about 2% higher. Whether any of these reports turn out to be true, it seems that the mere fact that there are such rumors suggests that something is bubbling within the company.
4. Earnings season continued this week: Dow Chemical (NYSE: DOW), P&G (NYSE: PG), Pfizer (NYSE: PFE), MasterCard (NYSE: MA), MGM (NYSE: MGM), CBS (NYSE: CBS), priceline.com (Nasdaq: PCLN), Electronic Arts (Nasdaq: ERTS), Time Warner (NYSE: TWX), Allstate (NYSE: ALL), News Corp. (Nasdaq: NWSA), Kraft (NYSE: KFT) and Activision Blizzard (Nasdaq: ATVI).
5. Retail sales for the month of July came in this week, once again showing a mixed picture for the health of the US consumer. Target (NYSE: TGT) same store sales rose 2%, Costco (Nasdaq: COST) saw comps up 6%, Limited (NYSE: LTD) reported a 12% jump in comps, Abercrombie (NYSE: ANF) comps surged 7% and JCPenney (NYSE: JCP) comps fell 0.6%.
6. Shares of ExpressJet (NYSE: XJT) surged 100% on Wednesday of this week as SkyWest (Nasdaq: SKYW) announced that it will acquire the company for $6.75/share.
7. Research In Motion (Nasdaq: RIMM) unveiled its BlackBerry 6 OS and new Torch smartphone this week. The stock fell more than 7% amid the news. The phone will be offered exclusively through AT&T (NYSE: T), which may or may not turn consumers on to the new device. Around the Street, analysts were not too impressed with RIM's new updates.
8. Auto sales for the month of July came out this week: GM sales rose 5.4%, Ford (NYSE: F) sales rose 3.1%, Chrysler sales were up 5% and Toyota's (NYSE: TM) sales fell 6.8%.
9. Shares of Barnes & Noble (NYSE: BKS) surged 20% on Wednesday of this week as the company announced that it would evaluate strategic alternatives, including a possible sale of the company. The company's Board came to this decision based on the price of Barnes & Noble shares in the marketplace, which the Board believes are now significantly undervalued.
10. Pending home sales for the month of June came in at down 2.6%, vs. the consensus of up 4%. Pending home sales during May fell 30%. On a year-over-year basis, the metric was down 20.1%, which compares to the May reading of down 15.6%. The S&P Homebuilder ETF (NYSE: XHB) rose 2.6% on Monday and fell the rest of the week.
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1. Most of this week's trading decisions were dominated by a looming jobs number on Friday. Ahead of the number, ADP employment and initial claims came in mixed with ADP indicating a better-than-expected figure and the weekly claims reading coming in slightly higher than economists had expected. Still, most traders weren't expecting the drastic decline in jobs that hit the Street on Friday morning: nonfarm payrolls came in at down 131,000, far worse than the down 65,000 economist estimate. Also importantly, private sector payrolls missed the Street with a reading of 71,000 but manufacturing payrolls beat the Street at 36,000. The unemployment rate was flat at 9.5%.
2. As a last-second entry to the Top 10 list, HP's (NYSE: HPQ) CEO Mark Hurd unexpectedly resigned from the company after the closing bell sounded on Wall Street. The resignation follows a probe of HP's conduct, but the company has said that the probe was not related to financials. In tandem with the exec resignation, HP also issued some preliminary numbers and raised its FY10 outlook. Sees Q3 sales of about $30.7 billion and adj-EPS of $1.08. The Street is looking for Q3 sales of $30.01 billion on EPS of $1.07. Sees Q4 sales of $32.5-$32.7 billion on EPS of $1.25-$1.27. The Street estimates are for sales of $32.6 billion on EPS of $1.26. Raises its FY10 EPS guidance from $4.45-$4.50 to $4.49-$4.51, vs. the consensus of $4.49. Sees sales of $125.3-$125.5 billion, vs. cons. of $124.6 billion.
3. Numerous rumors swirled around Goldman Sachs (NYSE: GS) this week as reports that the bank could spin-off its private equity or prop-trading operations quickly lead to rumors that the company could go private. A spokesperson from Goldman, however, later denied these rumors. Shares of GS closed this week about 2% higher. Whether any of these reports turn out to be true, it seems that the mere fact that there are such rumors suggests that something is bubbling within the company.
4. Earnings season continued this week: Dow Chemical (NYSE: DOW), P&G (NYSE: PG), Pfizer (NYSE: PFE), MasterCard (NYSE: MA), MGM (NYSE: MGM), CBS (NYSE: CBS), priceline.com (Nasdaq: PCLN), Electronic Arts (Nasdaq: ERTS), Time Warner (NYSE: TWX), Allstate (NYSE: ALL), News Corp. (Nasdaq: NWSA), Kraft (NYSE: KFT) and Activision Blizzard (Nasdaq: ATVI).
5. Retail sales for the month of July came in this week, once again showing a mixed picture for the health of the US consumer. Target (NYSE: TGT) same store sales rose 2%, Costco (Nasdaq: COST) saw comps up 6%, Limited (NYSE: LTD) reported a 12% jump in comps, Abercrombie (NYSE: ANF) comps surged 7% and JCPenney (NYSE: JCP) comps fell 0.6%.
6. Shares of ExpressJet (NYSE: XJT) surged 100% on Wednesday of this week as SkyWest (Nasdaq: SKYW) announced that it will acquire the company for $6.75/share.
7. Research In Motion (Nasdaq: RIMM) unveiled its BlackBerry 6 OS and new Torch smartphone this week. The stock fell more than 7% amid the news. The phone will be offered exclusively through AT&T (NYSE: T), which may or may not turn consumers on to the new device. Around the Street, analysts were not too impressed with RIM's new updates.
8. Auto sales for the month of July came out this week: GM sales rose 5.4%, Ford (NYSE: F) sales rose 3.1%, Chrysler sales were up 5% and Toyota's (NYSE: TM) sales fell 6.8%.
9. Shares of Barnes & Noble (NYSE: BKS) surged 20% on Wednesday of this week as the company announced that it would evaluate strategic alternatives, including a possible sale of the company. The company's Board came to this decision based on the price of Barnes & Noble shares in the marketplace, which the Board believes are now significantly undervalued.
10. Pending home sales for the month of June came in at down 2.6%, vs. the consensus of up 4%. Pending home sales during May fell 30%. On a year-over-year basis, the metric was down 20.1%, which compares to the May reading of down 15.6%. The S&P Homebuilder ETF (NYSE: XHB) rose 2.6% on Monday and fell the rest of the week.
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