Top 10 News Items 9/8-9/11: Gold Rips Through $1,000; Cadbury Turns Down Kraft Offer; Morgan Stanley's Mack to Give Up Chairman Position
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Here is a recap of the top news items from this week on Wall Street:
1. Gold prices continued higher this week, with the commodity breaking through, and holding, above the $1,000 level. On Tuesday, after moving above this psychological level, commodities traders pushed the price below $1,000, but by the end of the week, the metal had retaken this resistance level, closing around $1,007.
2. Coming back from the Labor Day weekend, traders were surprised with a rather large M&A story: Kraft (NYSE: KFT) had made a proposal to Cadbury (NYSE: CBY), which was rejected by Cadbury. Kraft proposed an offer for Cadbury of 300 pence in cash and 0.2589 new Kraft Foods shares per Cadbury share. This values each Cadbury share at 745 pence (based on the closing price of $28.10 for a Kraft Foods share on 4 September 2009 and an exchange rate of 1.6346 $/pounds Sterling) and values the entire issued share capital of Cadbury at pounds Sterling 10.2 billion. Kraft shares finished about 7% lower, while Cadbury shares surged more than 38%.
3. Morgan Stanley's (NYSE: MS) famed Chairman and CEO, John Mack, has announced that at the beginning of next year, he will give up his CEO position and continue on as only the Chairman. Co-President James Gorman has been named Mack's successor as CEO.
4. Citigroup (NYSE: C) completed its previously announced preferred-for-common share exchange, making the U.S. government now an owner of 7.7 billion common shares, or 33.6% of the total outstanding shares. The move will make Citi the first ever common stock ownership by the government of any publicly traded company. Citi shares closed this week modestly lower.
5. At its highly-anticipated "Let's Rock" conference in San Francisco on Wednesday, Steve Jobs unveiled a new lineup of iPods, among other things. While the market shrugged off the iPod update which was expected, the real surprise was Jobs himself who had a liver transplant earlier this year. Jobs' was greeted with a standing ovation by the audience. Jobs, looking thin and talking in a scratchy voice told the crowd he received a liver of a young victim of a car accident and urged the crowed to become organ donors. Jobs said "I wouldn't be here without such generosity." Jobs also applauded Apple management for running the company during the difficult time.
6. Monsanto (NYSE: MON) warned this week, sending its shares about 5% lower. The ag company reaffirmed its FY09 ongoing EPS guidance at the low end of its previously-announced range of $4.40 to $4.50, which compares to the consensus of $4.41. Monsanto also said it expects ongoing EPS in the range of $3.10-$3.30 for FY10, which is below the consensus of $4.12.
7. Just before the open on Friday, FedEx (NYSE: FDX) raised its Q1 outlook: from $0.30-$0.45 to about $0.58, which compares to the Street estimate of $0.44. FedEx also issued Q2 EPS guidance of $0.65-$0.95. The stock rallied more than 6% following the news.
8. Texas Instruments (NYSE: TXN) raised its Q3 EPS guidance from $0.29-$0.39 (with a 1 cent charge) to $0.37-$0.41. Sales for the quarter move from $2.50-$2.80 billion to $2.73-$2.87 billion. The Street is currently looking for Q3 EPS and sales of $0.35 and $2.69 billion, respectively. Despite the bullish news, shares of Texas Instruments finished this week slightly lower.
9. One of the largest Gold companies in the world, Barrick Gold (NYSE: ABX) made a convicted bet this week, getting rid of its gold hedges in order to gain full leverage to the gold price on all future production. The company said it was due this due to: an increasingly positive outlook on the gold price and continued robust gold supply/demand fundamentals.
10. General Electric (NYSE: GE) were relieved this week as Wall Street firms gave the stock a little bit o' loving this week, getting upgraded at JPMorgan and a price target raise over at Goldman. The stock finished this week about 5.8% higher.
1. Gold prices continued higher this week, with the commodity breaking through, and holding, above the $1,000 level. On Tuesday, after moving above this psychological level, commodities traders pushed the price below $1,000, but by the end of the week, the metal had retaken this resistance level, closing around $1,007.
2. Coming back from the Labor Day weekend, traders were surprised with a rather large M&A story: Kraft (NYSE: KFT) had made a proposal to Cadbury (NYSE: CBY), which was rejected by Cadbury. Kraft proposed an offer for Cadbury of 300 pence in cash and 0.2589 new Kraft Foods shares per Cadbury share. This values each Cadbury share at 745 pence (based on the closing price of $28.10 for a Kraft Foods share on 4 September 2009 and an exchange rate of 1.6346 $/pounds Sterling) and values the entire issued share capital of Cadbury at pounds Sterling 10.2 billion. Kraft shares finished about 7% lower, while Cadbury shares surged more than 38%.
3. Morgan Stanley's (NYSE: MS) famed Chairman and CEO, John Mack, has announced that at the beginning of next year, he will give up his CEO position and continue on as only the Chairman. Co-President James Gorman has been named Mack's successor as CEO.
4. Citigroup (NYSE: C) completed its previously announced preferred-for-common share exchange, making the U.S. government now an owner of 7.7 billion common shares, or 33.6% of the total outstanding shares. The move will make Citi the first ever common stock ownership by the government of any publicly traded company. Citi shares closed this week modestly lower.
5. At its highly-anticipated "Let's Rock" conference in San Francisco on Wednesday, Steve Jobs unveiled a new lineup of iPods, among other things. While the market shrugged off the iPod update which was expected, the real surprise was Jobs himself who had a liver transplant earlier this year. Jobs' was greeted with a standing ovation by the audience. Jobs, looking thin and talking in a scratchy voice told the crowd he received a liver of a young victim of a car accident and urged the crowed to become organ donors. Jobs said "I wouldn't be here without such generosity." Jobs also applauded Apple management for running the company during the difficult time.
6. Monsanto (NYSE: MON) warned this week, sending its shares about 5% lower. The ag company reaffirmed its FY09 ongoing EPS guidance at the low end of its previously-announced range of $4.40 to $4.50, which compares to the consensus of $4.41. Monsanto also said it expects ongoing EPS in the range of $3.10-$3.30 for FY10, which is below the consensus of $4.12.
7. Just before the open on Friday, FedEx (NYSE: FDX) raised its Q1 outlook: from $0.30-$0.45 to about $0.58, which compares to the Street estimate of $0.44. FedEx also issued Q2 EPS guidance of $0.65-$0.95. The stock rallied more than 6% following the news.
8. Texas Instruments (NYSE: TXN) raised its Q3 EPS guidance from $0.29-$0.39 (with a 1 cent charge) to $0.37-$0.41. Sales for the quarter move from $2.50-$2.80 billion to $2.73-$2.87 billion. The Street is currently looking for Q3 EPS and sales of $0.35 and $2.69 billion, respectively. Despite the bullish news, shares of Texas Instruments finished this week slightly lower.
9. One of the largest Gold companies in the world, Barrick Gold (NYSE: ABX) made a convicted bet this week, getting rid of its gold hedges in order to gain full leverage to the gold price on all future production. The company said it was due this due to: an increasingly positive outlook on the gold price and continued robust gold supply/demand fundamentals.
10. General Electric (NYSE: GE) were relieved this week as Wall Street firms gave the stock a little bit o' loving this week, getting upgraded at JPMorgan and a price target raise over at Goldman. The stock finished this week about 5.8% higher.
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