Top 10 News Items for 10/18-10/22: Bank Concerns Remain Amid BofA's Bondholder Suit, Apple Still Top Dog, China Raises 1-Year Rates
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Here is a recap of the top news items from this week on Wall Street:
1. Investor concerns related to the banking sector remained this week as, following last week mortgage mess, a group of bondholders (including PIMCO, the NY Fed and BlackRock) filed a lawsuit against BofA (NYSE: BAC) claiming that the bank's Countrywide unit failed to properly service loans of so-called sour mortgages. Shares of BofA fell more than 4% on Tuesday of this week.
2. Apple (Nasdaq: AAPL) shares ran-up to all-time highs on Monday ahead of earnings but, despite much better-than-expected earnings, shares sold-off by as much as 6% following the report. Buyers stepped in over Tuesday's session, however shares remained mostly under $310 for the remainder of the week.
3. Chinese officials announced that regulators will raise 1-year lending and deposit rates for the first time since December 2007. China's central bank said it will raise the one-year yuan lending rate from 5.31% to 5.56%, and the one-year yuan deposit rate from 2.25% to 2.5%. This is the strongest move to date by China to withdraw monetary policy stimulus following the global recession.
4. Partly related to the above bullet, the dollar showed signs of life this week and as a result, commodities were put under pressure. The euro/dollar trade finished this week at $1.3928, while the dollar/yen trade closed at 81.38.
5. Elsewhere on the earnings front: Citi (NYSE: C), IBM (NYSE: IBM), Coke (NYSE: KO), Goldman (NYSE: GS), J&J (NYSE: JNJ), Wells Fargo (NYSE: WFC), Boeing (NYSE: BA), AT&T (NYSE: T), Caterpillar (NYSE: CAT) and McDonald's (NYSE: MCD) reported.
6. Several very high multiple momentum stocks posted strong earnings this week: Amazon (Nasdaq: AMZN), Netflix (Nasdaq: NFLX), Riverbed (Nasdaq: RVBD) and Baidu (Nasdaq: BIDU).
7. Shares of Amylin (Nasdaq: AMLN) and Alkermes (Nasdaq: ALKS) fell 46% and 28%, respectively, on Wednesday of this week following an FDA request for more tests on the companies bydureon product. Additionally, even the massive Eli Lilly (NYSE: LLY), another collaborator on bydureon, fell almost 4% on the news.
8. Shares of Microsoft (Nasdaq: MSFT) tumbled almost 3% on Tuesday following news that the company's Chief Software Architect, Ray Ozzie, is stepping down.
9. In M&A action, St. Jude (NYSE: STJ) announced that it will buy AGA Medical (Nasdaq: AGAM) in a $1.3 billion deal. Additionally, Northeast Utilities (NYSE: NU) said it will merge with NSTAR (NYSE: NST) in a $17.5 billion deal.
10. The Fed released its Beige Book report on Wednesday of this week, signaling a "modest" rise in economic activity during the September and the beginning of October. Here is the full report.
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1. Investor concerns related to the banking sector remained this week as, following last week mortgage mess, a group of bondholders (including PIMCO, the NY Fed and BlackRock) filed a lawsuit against BofA (NYSE: BAC) claiming that the bank's Countrywide unit failed to properly service loans of so-called sour mortgages. Shares of BofA fell more than 4% on Tuesday of this week.
2. Apple (Nasdaq: AAPL) shares ran-up to all-time highs on Monday ahead of earnings but, despite much better-than-expected earnings, shares sold-off by as much as 6% following the report. Buyers stepped in over Tuesday's session, however shares remained mostly under $310 for the remainder of the week.
3. Chinese officials announced that regulators will raise 1-year lending and deposit rates for the first time since December 2007. China's central bank said it will raise the one-year yuan lending rate from 5.31% to 5.56%, and the one-year yuan deposit rate from 2.25% to 2.5%. This is the strongest move to date by China to withdraw monetary policy stimulus following the global recession.
4. Partly related to the above bullet, the dollar showed signs of life this week and as a result, commodities were put under pressure. The euro/dollar trade finished this week at $1.3928, while the dollar/yen trade closed at 81.38.
5. Elsewhere on the earnings front: Citi (NYSE: C), IBM (NYSE: IBM), Coke (NYSE: KO), Goldman (NYSE: GS), J&J (NYSE: JNJ), Wells Fargo (NYSE: WFC), Boeing (NYSE: BA), AT&T (NYSE: T), Caterpillar (NYSE: CAT) and McDonald's (NYSE: MCD) reported.
6. Several very high multiple momentum stocks posted strong earnings this week: Amazon (Nasdaq: AMZN), Netflix (Nasdaq: NFLX), Riverbed (Nasdaq: RVBD) and Baidu (Nasdaq: BIDU).
7. Shares of Amylin (Nasdaq: AMLN) and Alkermes (Nasdaq: ALKS) fell 46% and 28%, respectively, on Wednesday of this week following an FDA request for more tests on the companies bydureon product. Additionally, even the massive Eli Lilly (NYSE: LLY), another collaborator on bydureon, fell almost 4% on the news.
8. Shares of Microsoft (Nasdaq: MSFT) tumbled almost 3% on Tuesday following news that the company's Chief Software Architect, Ray Ozzie, is stepping down.
9. In M&A action, St. Jude (NYSE: STJ) announced that it will buy AGA Medical (Nasdaq: AGAM) in a $1.3 billion deal. Additionally, Northeast Utilities (NYSE: NU) said it will merge with NSTAR (NYSE: NST) in a $17.5 billion deal.
10. The Fed released its Beige Book report on Wednesday of this week, signaling a "modest" rise in economic activity during the September and the beginning of October. Here is the full report.
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