Top 10 News Items 9/8-9/12: Lehman Concerns Hit a Crescendo; WaMu, AIG, Merrill Worries Grow; GM Rises 20%

September 12, 2008 4:17 PM EDT

This is a recap of this week's major news on Wall Street:

1. Shares of Lehman Brothers (NYSE: LEH) fell from over $16 to under $4 this week, a 78% decline. Lehman was thee news topic the media was talking about this week. The slide began Monday as Oppenheimer's Meredith Whitney cut estimates on the bank. Tuesday, the stock continued its drop as reports were heard that an investment by Korea Development Bank were now off the table. Midway through the week, Lehman had to pre-announce its Q3 earnings in an attempt to halt the drastic decline in the bank's stock price. Lehman reported a Q3 loss of $5.92 and also announced that it would spin-off $25-$30 billion of its commercial real estate portfolio and sell a majority stake in its Neuberger Berman branch. The company is now seeking a fire sale of the entire firm, expected this weekend.

2. Washington Mutual (NYSE: WM), AIG (NYSE: AIG) and Merrill Lynch (NYSE: MER) also had very bad weeks as investors began speculating about which financial company could be next to run into trouble. WaMu fell about 41% this week, AIG sunk 43% and Merrill ended the week down about 37%.

3. Shares of General Motors (NYSE: GM) rose more than 20% this week amid falling crude prices and investor speculation following the Fannie/Freddie bailouts that the government could eventually help the Big Three automakers. Friday, GM's CEO, Rick Wagoner, appeared at an all-day Senate energy committee, effectively lobbying for Congress to approve a $25 billion low-cost loan proposal.

4. This seasons largest hurricane, Ike, entered the Gulf of Mexico earlier this week. Officials have been evacuating cities in Texas along the coast, as well as oil drilling platforms, all week, yet crude oil continued to decline. In fact, crude briefly pushed below the $100 level, but quickly snapped back over this major psychological level.

5. Last weeks reports that Altria (NYSE: MO) could buy UST (NYSE: UST) were confirmed this week. UST agreed to be acquired for $69.50 per share in cash.

6. Sirius XM Radio (Nasdaq: SIRI) issued an update for its expected '08 and '09 subscribers on Tuesday. The company sees 19.5 million subscribers in '08 and 21.5 million subscribers in '09. Sales are expected to be $2.4 billion for FY08 and $2.7 billion for FY09. The stock was down more than 27% this week.

7. Thursday before the market opened, CSX Corp. (NYSE: CSX) raised its FY08 EPS guidance from $3.40-$3.60 to $3.65-$3.75, versus the consensus of $3.57. CSX also sees long-term annual growth in operating income of 15-20%, compared to prior guidance of 13-15%. EPS are expected to grow 20-25% annually, compared to previous guidance of 18-21%. The stock has risen more than 12% on the news this week.

8. Tuesay, Apple's (Nasdaq: AAPL) Steve Jobs was the keynote speaker at an Apple special event titled "Let's Rock!". Jobs unveiled a new iPod nano and a redesigned iPod Touch, each with lowered prices. Many analysts considered the event a disappointment as the company failed to surprise the markets. Apple stock was down more than $10 over the week.

9. Tuesday after the close, FedEx raised its Q1 EPS guidance from $0.80-$1.00 to $1.23, versus the Street consensus is $0.95. For FY09, the company reaffirmed its EPS guidance of $4.75-$5.25. Shares of FedEx rose more than 7% from Tuesday's close to Friday's close.

10. Pending home sales for the month of July came in at down 3.2%, which was lower than the Street consensus of a 1.5% drop.

Related Categories

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Related Entities

• UBS
• Pending Home Sales
• Citi
• Merrill Lynch
• Lehman Brothers
• Meredith Whitney
• Steve Jobs
• Crude Oil

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