Top 10 News Items 9/27-10/1: HP Names Leo Apotheker as New Pres, CEO, AIG Details Plan to Repay Taxpayers, Fed Considering More Open-Ended, Smaller-Scale Plan If Treasury Purchases Resume
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Here is a recap of the top news items from this week on Wall Street:
1. Hewlett-Packard (NYSE: HPQ) finally announced a successor to former-CEO Mark Hurd this week. Leo Apotheker has been named as the tech-giants President and CEO after spending more than 20 years at Germany-based SAP. Shares of HP sold-off about 3% on Friday following the news. Additionally, earlier in the week, HP offered FY11 EPS guidance of $5.05-$5.15 on sales of $131.5-$133.5 billion.
2. American International Group Inc. (NYSE: AIG) announced Thursday morning that it has reached an agreement to repay the government for the taxpayer bailout assistance it received during the financial crisis. The plan is for AIG to repay entirely the $20 billion it owes to the Federal Reserve Bank of New York ending the Fed credit facility. This will be partially funded by the initial public offering of its American International Assurance Co. and the pending sale of its foreign life insurance company to MetLife Inc. (NYSE: MET). The U.S. Treasury Department will convert $49.1 billion of preferred stock in AIG into 1.66 billion common shares, which it will sell on the open market over time. AIG also plans to issue up to 75 million warrants with the strike price of $75 per share to its existing common shareholders. The stock finished this week about 5% higher.
3. After the close Monday, the Wall Street Journal reported that the Federal Reserve is considering a more open-ended and smaller scale plan if it resumes the purchases of long-term U.S. Treasury securities to bolster the sluggish economic recovery, rather than another plan for massive bond purchases with a finite end, similar to the plan used in 2009 to revive the economy. The Fed has said that the determination of deciding to step up bond purchases will come following upcoming economic data and inflationary bellwethers, after which officials might decide that no action is necessary.
4. Unilever (NYSE: UL) announced a $3.7 billion purchase of Alberto-Culver (NYSE: ACV) this week. The deal will make Unilever the world’s leader in hair conditioning, second in shampoo and third in hair styling. Shares of ACV rose nearly 20% on Monday amid the news.
5. Also on the M&A front, shares of AirTran (NYSE: AAI) rallied 61% on Monday as Southwest (NYSE: LUV) disclosed that it plans to acquire the company at $7.69 per share. The deal is being valued at around $3.4 billion including AirTran's debt.
6. Shares of the momentous Green Mountain Coffee Roasters (Nasdaq: GMCR) were slammed by more than 16% on Wednesday of this week following reports of an SEC inquiry related to "certain revenue recognition practices and the Company’s relationship with one of its fulfillment vendors." Shares finished just barely in positive territory on Thursday, but tumbled another 5% on Friday.
7. Initial jobless claims for last week came in better-than-expected at 453,000. The Street was looking for initial claims of 460,000. Continuing claims for the week ended Sept. 18, meanwhile, came in at 4.457 million.
8. Consumer spending and personal incomes ticked higher than expected in August, bolstered by the resumption of extended unemployment benefits. The Commerce Department reported on Friday that consumer spending rose 0.4 percent in August, equaling the increase for July. Economists had expected slightly slower growth in consumer spending at 0.3 percent. Personal incomes rose 0.5 percent in August, marking the highest increase for the reading in eight months and ahead of the 0.2 percent rise in July. Economists had been looking for a 0.3 percent increase in personal incomes.
9. The SEC released a report this week in an attempt to find some cause for the May 6th "flash crash." Federal regulators found that the anomaly was triggered by a large trader's sale of futures contracts through a computer trading system, specifically, in futures E-Mini trading.
10. Shares of Research In Motion (Nasdaq: RIMM) finished the week on a strong note as the maker of BlackBerry unveiled its new tablet device, the "PlayBook". The PlayBook will sport WiFi and Bluetooth connectivity, but will require a link with a BlackBerry smartphone to access a cellular network. The device bolsters a smaller screen than the iPad, but also comes in slightly lighter.
1. Hewlett-Packard (NYSE: HPQ) finally announced a successor to former-CEO Mark Hurd this week. Leo Apotheker has been named as the tech-giants President and CEO after spending more than 20 years at Germany-based SAP. Shares of HP sold-off about 3% on Friday following the news. Additionally, earlier in the week, HP offered FY11 EPS guidance of $5.05-$5.15 on sales of $131.5-$133.5 billion.
2. American International Group Inc. (NYSE: AIG) announced Thursday morning that it has reached an agreement to repay the government for the taxpayer bailout assistance it received during the financial crisis. The plan is for AIG to repay entirely the $20 billion it owes to the Federal Reserve Bank of New York ending the Fed credit facility. This will be partially funded by the initial public offering of its American International Assurance Co. and the pending sale of its foreign life insurance company to MetLife Inc. (NYSE: MET). The U.S. Treasury Department will convert $49.1 billion of preferred stock in AIG into 1.66 billion common shares, which it will sell on the open market over time. AIG also plans to issue up to 75 million warrants with the strike price of $75 per share to its existing common shareholders. The stock finished this week about 5% higher.
3. After the close Monday, the Wall Street Journal reported that the Federal Reserve is considering a more open-ended and smaller scale plan if it resumes the purchases of long-term U.S. Treasury securities to bolster the sluggish economic recovery, rather than another plan for massive bond purchases with a finite end, similar to the plan used in 2009 to revive the economy. The Fed has said that the determination of deciding to step up bond purchases will come following upcoming economic data and inflationary bellwethers, after which officials might decide that no action is necessary.
4. Unilever (NYSE: UL) announced a $3.7 billion purchase of Alberto-Culver (NYSE: ACV) this week. The deal will make Unilever the world’s leader in hair conditioning, second in shampoo and third in hair styling. Shares of ACV rose nearly 20% on Monday amid the news.
5. Also on the M&A front, shares of AirTran (NYSE: AAI) rallied 61% on Monday as Southwest (NYSE: LUV) disclosed that it plans to acquire the company at $7.69 per share. The deal is being valued at around $3.4 billion including AirTran's debt.
6. Shares of the momentous Green Mountain Coffee Roasters (Nasdaq: GMCR) were slammed by more than 16% on Wednesday of this week following reports of an SEC inquiry related to "certain revenue recognition practices and the Company’s relationship with one of its fulfillment vendors." Shares finished just barely in positive territory on Thursday, but tumbled another 5% on Friday.
7. Initial jobless claims for last week came in better-than-expected at 453,000. The Street was looking for initial claims of 460,000. Continuing claims for the week ended Sept. 18, meanwhile, came in at 4.457 million.
8. Consumer spending and personal incomes ticked higher than expected in August, bolstered by the resumption of extended unemployment benefits. The Commerce Department reported on Friday that consumer spending rose 0.4 percent in August, equaling the increase for July. Economists had expected slightly slower growth in consumer spending at 0.3 percent. Personal incomes rose 0.5 percent in August, marking the highest increase for the reading in eight months and ahead of the 0.2 percent rise in July. Economists had been looking for a 0.3 percent increase in personal incomes.
9. The SEC released a report this week in an attempt to find some cause for the May 6th "flash crash." Federal regulators found that the anomaly was triggered by a large trader's sale of futures contracts through a computer trading system, specifically, in futures E-Mini trading.
10. Shares of Research In Motion (Nasdaq: RIMM) finished the week on a strong note as the maker of BlackBerry unveiled its new tablet device, the "PlayBook". The PlayBook will sport WiFi and Bluetooth connectivity, but will require a link with a BlackBerry smartphone to access a cellular network. The device bolsters a smaller screen than the iPad, but also comes in slightly lighter.
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