Top 10 News Items for 12/17 to 12/21: 'Plan B' Deflates; ICE Makes NYSE Acquisition; GM Reduces Treasury's Grip; Ackman Tears into Herbalife

December 21, 2012 4:17 PM EST Send to a Friend
1. Thursday night, Republican leader John Boehner's 'Plan B' budget proposal failed to get support from his own party, resulting in the bill being pulled without a formal vote. The plan was being sold by Republican supporters as a plan that would not increase taxes. Some lawmakers saw through it and wouldn't throw their support.

Markets were pressured following the headlines, with the Nasdaq, S&P 500, and Dow Jones all closing lower.

For more color, click here.

2. After some rumblings on Wednesday night, IntercontinentalExchange (NYSE: ICE) confirmed a deal to acquire NYSE Euronext (NYSE: NYX) for $33.12 per share in cash and stock, or a total of approximately $8.2 billion.

The deal would knock out the venerable trading firm, whose legacy spans 200-plus years. Notably, IntercontinentalExchange has been around for just over a decade, capitalizing on energy and commodity trading, as well as their derivatives.

3. On Wednesday, General Motors (NYSE: GM) will purchase 200 million shares of GM common stock held by the U.S. Department of the Treasury for $5.5 billion, or $27.50 per share. After the repurchase, Treasury will continue to own approximately 300 million shares of GM common stock, or approximately 19 percent of the outstanding shares on a fully diluted basis.

The Treasury noted that it got back $28.7 billion of the $49.5 billion it lent to GM back in 2008 and 2009.

4. Herbalife (NYSE: HLF) was the big story for traders this week. Earlier, it was reported that Pershing Square's Bill Ackman was short the stock, following months of speculation over the position.

Herbalife CEO Michael Johnson issued a response to Ackman, saying he was manipulating the market. Whether the response means Ackman hit home or not is up for debate. Going above and beyond that, Herbalife is even going to host its own event in response.

5. BlackBerry maker Research In Motion's (Nasdaq: RIMM) reported third-quarter 2013 results on Thursday night, with a loss of 22 cents per share coming in narrower than expectations.

Amid some weakness Friday over concerns of a rough fourth-quarter and RIMs shift in accounting for Services revs, some are gearing for a solid BB10 launch in January/February 2013. For more analyst comments, click here.

6. Seems like a week full of mergers. Knight Capital Group (NYSE: KCG) finally decided on a buyer after receiving a few offers in November from GETCO and Virtu. Ultimately, Knight went with GETCO, which valued Knight at$3.75 per share in cash and stock.

Knight CEO Thomas Joyce will serve as Executive Chairman for the combined firm.

Notably, the NYSE acquisition and the Knight acquisition highlight just how important a role computers and automated trading are playing in today's market. For a while, Nasdaq OMX (Nasdaq: NDAQ) was attempting to make a bid for NYSE, though nothing panned-out from that effort.

7. Apple (Nasdaq: AAPL) closed the week higher following sales numbers out of China for the iPhone 5 in its first weekend. Last Sunday, Apple said it sold 2 million of the devices in China, mixed to some analyst estimates.

On Monday, Citi downgraded the stock from Buy to Neutral, while trimming its price target by $100 to $575. The firm cited slowing iPhone demand due to market saturation and near-term supply chain order cuts. For more color on the call, click here.

Apple has closed lower for 12 of the last 14 weeks before this week.

8. Sprint (NYSE: S) firmed up and made an official offer for Clearwire (Nasdaq: CLWR) this week. According to a release on Monday, Sprint raised its bid to $2.97 per share of Clearwire, up from the prior offer of $2.90 per share. For more on the revised offer, click here.

9. U.S. gross domestic product (GDP) grew more than previously expected, according to latest data out of the Bureau of Economic Analysis this week.

GDP grew 3.1 percent from the second to third quarter, up from prior estimates and the current consensus of 2.7 percent growth. According to the BEA, "The third estimate has not greatly changed the general picture of the economy for the third quarter except that personal consumption expenditures (PCE) is now showing a modest pickup, and imports is now showing a downturn."

10. Following the tragic events at Sandy Hook Elementary last week, certain stocks were on the move this week. Names like Smith & Wesson (Nasdaq: SWHC), Strum Ruger (NYSE: RGR), and Olin Corp (NYSE: OLN) were pressured for the role they play in firearms and ammo manufacturing. Private equity firm Cerberus took the step to sell out of Freedom Group, a non-public company that runs Bushmaster.

Others, like video game makers Electronic Arts (Nasdaq: EA), Activision (Nasdaq: ATVI), and TakeTwo (Nasdaq: TTWO), were lower as they received blame over violent video games. Dick's Sporting Goods (NYSE: DKS) even felt the need to stop sales of sporting rifles, a significant move no matter what portion of revenue they account for.


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