Top 10 News Items 9/19-9/23: 'Operation Twist' is a Go; S&P 500 Falls 7%; HP Gives the Boot to Leo, Names Meg Whitman CEO
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Here is a recap of the top news items from this week on Wall Street:
1. Wednesday Ben Bernanke and the FOMC confirmed plans to change the composition of the Federal Reserve balance sheet. By the end of June 2012, the Fed will $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less.
2. Stocks fell nearly 7 percent (as measured by the S&P 500) this week amid a wave of fears related to topics which have been rumored over ad nauseum for the last several months -- but now seem to becoming more fact than speculation. With the Fed's rate decision this week, the group considered "significant downside risks to the economic outlook, including strains in global financial markets." In China, signs of slowing growth were seen and, in the embattled Eurozone, concerns of debt issues at French banks came to the foreground.
3. HP (NYSE: HPQ) shocked the Street this week by letting recently-hired Leo Apotheker in favor of former eBay CEO Meg Whitman. The stock ended down about 5 percent for the week.
4. COMEX gold plunged a whopping $169 per ounce this week, closing around $1,652 after closing last week's session around $1,820. The GLD (NYSE: GLD) tumbled more than 9 percent. The dollar rallied sharply as concerns related to the euro weighed.
5. Following several days of speculation, United Technologies (NYSE: UTX) announced it will acquire Goodrich (NYSE: GR) for $127.50 per share. Goodrich shares rose nearly 30 percent this week and were up more than 9 percent last week.
6. Netflix (Nasdaq: NFLX), with the stock down more than 45 percent since the middle of last week, announced late Sunday the company will split off its DVD-rental business into a separate entity entirely. The new business will be named "Qwikster," and the separation will take place over the next several weeks. Traders did not necessarily like the news.
7. As stated above, French banks were the target of some headline risk this week as a number of reports came out suggesting these could be the next to fall of the map. PIMCO's Mohamed El-Erian believes the French banks -- like BNP Paribas and Societe Generale -- may tip Europe into a full-blown financial crisis.
8. Tyco International Ltd. (NYSE: TYC) announce Monday its Board approved a plan to split the company into three independent, publicly traded companies: ADT North America, he world's leading provider of flow control products and services and the world's leading commercial fire and security business. While the stock moved higher on Monday, shares sold off for the remainder of the week
9. The IMF cut its 2011 and 2012 world growth forecasts, saying Europe may worsen outlook. The Fund now sees '11 and '12 global growth of 4%, US growth of 1.5% in 2011 and 1.8% in 2012, and growth of 1.6% in the Euro this year.
10. Moody's downgraded the long-term ratings on BofA (NYSE: BAC) and JPMorgan (NYSE: JPM), and the short-term rating on Citi (NYSE: C) this week. The firm cited "a decrease in the probability that the US government would support the banks, if needed." The XLF (NYSE: XLF) declined nearly 10 percent this week.
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1. Wednesday Ben Bernanke and the FOMC confirmed plans to change the composition of the Federal Reserve balance sheet. By the end of June 2012, the Fed will $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less.
2. Stocks fell nearly 7 percent (as measured by the S&P 500) this week amid a wave of fears related to topics which have been rumored over ad nauseum for the last several months -- but now seem to becoming more fact than speculation. With the Fed's rate decision this week, the group considered "significant downside risks to the economic outlook, including strains in global financial markets." In China, signs of slowing growth were seen and, in the embattled Eurozone, concerns of debt issues at French banks came to the foreground.
3. HP (NYSE: HPQ) shocked the Street this week by letting recently-hired Leo Apotheker in favor of former eBay CEO Meg Whitman. The stock ended down about 5 percent for the week.
4. COMEX gold plunged a whopping $169 per ounce this week, closing around $1,652 after closing last week's session around $1,820. The GLD (NYSE: GLD) tumbled more than 9 percent. The dollar rallied sharply as concerns related to the euro weighed.
5. Following several days of speculation, United Technologies (NYSE: UTX) announced it will acquire Goodrich (NYSE: GR) for $127.50 per share. Goodrich shares rose nearly 30 percent this week and were up more than 9 percent last week.
6. Netflix (Nasdaq: NFLX), with the stock down more than 45 percent since the middle of last week, announced late Sunday the company will split off its DVD-rental business into a separate entity entirely. The new business will be named "Qwikster," and the separation will take place over the next several weeks. Traders did not necessarily like the news.
7. As stated above, French banks were the target of some headline risk this week as a number of reports came out suggesting these could be the next to fall of the map. PIMCO's Mohamed El-Erian believes the French banks -- like BNP Paribas and Societe Generale -- may tip Europe into a full-blown financial crisis.
8. Tyco International Ltd. (NYSE: TYC) announce Monday its Board approved a plan to split the company into three independent, publicly traded companies: ADT North America, he world's leading provider of flow control products and services and the world's leading commercial fire and security business. While the stock moved higher on Monday, shares sold off for the remainder of the week
9. The IMF cut its 2011 and 2012 world growth forecasts, saying Europe may worsen outlook. The Fund now sees '11 and '12 global growth of 4%, US growth of 1.5% in 2011 and 1.8% in 2012, and growth of 1.6% in the Euro this year.
10. Moody's downgraded the long-term ratings on BofA (NYSE: BAC) and JPMorgan (NYSE: JPM), and the short-term rating on Citi (NYSE: C) this week. The firm cited "a decrease in the probability that the US government would support the banks, if needed." The XLF (NYSE: XLF) declined nearly 10 percent this week.
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