Top 10 News Items for 6/1-6/4: Ugly Jobs Report Sends Stocks Tumbling; BP's Cap Operation Completed, But Well Still Spewing Oil; Euro Cracks Key $1.20 Level
Here is a recap of the top news items from this week on Wall Street:
1. A much worse-than-expected nonfarm payrolls number surprised the Street Friday, especially considering that Obama was out just days before touting, more or less, strong economic performance and a return to job growth. The Labor Department said 431,000 jobs were added during May, more than 100,000 below the 536,000 estimate economists had been looking for. Making things look even worse, of these 431,000 jobs, an astonishing 411,000 were attributed to temporary job hires by the US Census Bureau. Private sector payrolls rose just 41,000, which was versus the economist estimate of 180,000. On the "not completely terrible" side of things, the unemployment rate dipped slightly to 9.7%.
2. BP's (NYSE: BP) "top kill" operation failed over the Memorial Day weekend, causing the massive integrated oil company to move to the next option, capping a busted pipe. After halting the operation due to a stuck saw blade, BP successfully capped the pipe, however, a jagged cut has left a small space for fluid to leak out. Reports suggest that the capping has BP now capturing about 1,000 barrels of oil a day, leaving an estimated 19,000 barrels per day flowing into the poor Gulf of Mexico. Shares of BP fell 15% on Tuesday of this week (the first trading day of this week), gained 7% over Wednesday and Thursday, and closed the week with a 5% slide on Friday.
3. Continued concerns across the pond caused the euro to crack an important technical level at $1.20 vs. the dollar this week, the currency's lowest level since 2006.
4. Adding to the list of worries in Europe, debt issues in Hungary roiled markets worldwide this week. While the Hungarian economy is certainly rather small in comparison to other EU nations, the contagion of economic fear spreading to yet another country has traders getting defensive. Oddly, the euro had one of its worst days of this week on Friday, the day these Hungarian concerns arose, however, Hungary does not use the euro as a currency.
5. Retail sales for the month of May came in mixed this week. The SPDR S&P Retail ETF (NYSE: XRT) fell almost 5% this week. Goto our Retail Sales page to see a full run-down of all the same store sales results which were reported on Thursday.
6. On the M&A front this week, Covidien PLC (NYSE: COV) announced Tuesday that it has agreed to buy vascular device manufacturer ev3 Inc. (NASDAQ: EVVV) in a $2.6 billion cash deal that will continue the company’s move to remake its business. Details of deal will see Covidien pay $22.50 for each share of ev3, representing a premium of 19 percent over the closing price of the stock on last Friday.
7. Prudential PLC (NYSE: PUK) announced Wednesday that its deal to acquire Asian insurance company AIA from U.S. insurer American International Group Inc. (NYSE: AIG) for $35.5 billion is being terminated. The negotiations between the two companies fell apart after shareholders of Prudential rejected the hefty price tag, and AIG did not accept a lower $30.575 billion offer to appease investors.
8. Any stock related to oil services had an extremely rough week on Wall Street as new-found concerns that the slick from the BP oil spill could eventual make its way up the Atlantic coast, and, in worst-case scenarios, even across the Atlantic to Europe. Transocean (NYSE: RIG) shares fell 10% this week, Rowan Companies (NYSE: RDC) fell 7%, ENSCO (NYSE: ESV) shares fell 6% and Diamond Offshore (NYSE: DO) also fell 6%, just to a name a few.
9. Canada became the first Group of Seven nation to raise interest rates Tuesday, moving its key rate from 0.25% to 0.5%. Although the increased rate was related to the current sovereign debt risk in Europe, the Bank of Canada said any further increases would depend on the overall global economic condition.
10. Shares of Joy Global (Nasdaq: JOYG) surged more than 8% on Wednesday of this week as the company reported a solid "beat and raise" Q2. The stock added another 2% on Thursday, however sold-off about 6% on Friday.
1. A much worse-than-expected nonfarm payrolls number surprised the Street Friday, especially considering that Obama was out just days before touting, more or less, strong economic performance and a return to job growth. The Labor Department said 431,000 jobs were added during May, more than 100,000 below the 536,000 estimate economists had been looking for. Making things look even worse, of these 431,000 jobs, an astonishing 411,000 were attributed to temporary job hires by the US Census Bureau. Private sector payrolls rose just 41,000, which was versus the economist estimate of 180,000. On the "not completely terrible" side of things, the unemployment rate dipped slightly to 9.7%.
2. BP's (NYSE: BP) "top kill" operation failed over the Memorial Day weekend, causing the massive integrated oil company to move to the next option, capping a busted pipe. After halting the operation due to a stuck saw blade, BP successfully capped the pipe, however, a jagged cut has left a small space for fluid to leak out. Reports suggest that the capping has BP now capturing about 1,000 barrels of oil a day, leaving an estimated 19,000 barrels per day flowing into the poor Gulf of Mexico. Shares of BP fell 15% on Tuesday of this week (the first trading day of this week), gained 7% over Wednesday and Thursday, and closed the week with a 5% slide on Friday.
3. Continued concerns across the pond caused the euro to crack an important technical level at $1.20 vs. the dollar this week, the currency's lowest level since 2006.
4. Adding to the list of worries in Europe, debt issues in Hungary roiled markets worldwide this week. While the Hungarian economy is certainly rather small in comparison to other EU nations, the contagion of economic fear spreading to yet another country has traders getting defensive. Oddly, the euro had one of its worst days of this week on Friday, the day these Hungarian concerns arose, however, Hungary does not use the euro as a currency.
5. Retail sales for the month of May came in mixed this week. The SPDR S&P Retail ETF (NYSE: XRT) fell almost 5% this week. Goto our Retail Sales page to see a full run-down of all the same store sales results which were reported on Thursday.
6. On the M&A front this week, Covidien PLC (NYSE: COV) announced Tuesday that it has agreed to buy vascular device manufacturer ev3 Inc. (NASDAQ: EVVV) in a $2.6 billion cash deal that will continue the company’s move to remake its business. Details of deal will see Covidien pay $22.50 for each share of ev3, representing a premium of 19 percent over the closing price of the stock on last Friday.
7. Prudential PLC (NYSE: PUK) announced Wednesday that its deal to acquire Asian insurance company AIA from U.S. insurer American International Group Inc. (NYSE: AIG) for $35.5 billion is being terminated. The negotiations between the two companies fell apart after shareholders of Prudential rejected the hefty price tag, and AIG did not accept a lower $30.575 billion offer to appease investors.
8. Any stock related to oil services had an extremely rough week on Wall Street as new-found concerns that the slick from the BP oil spill could eventual make its way up the Atlantic coast, and, in worst-case scenarios, even across the Atlantic to Europe. Transocean (NYSE: RIG) shares fell 10% this week, Rowan Companies (NYSE: RDC) fell 7%, ENSCO (NYSE: ESV) shares fell 6% and Diamond Offshore (NYSE: DO) also fell 6%, just to a name a few.
9. Canada became the first Group of Seven nation to raise interest rates Tuesday, moving its key rate from 0.25% to 0.5%. Although the increased rate was related to the current sovereign debt risk in Europe, the Bank of Canada said any further increases would depend on the overall global economic condition.
10. Shares of Joy Global (Nasdaq: JOYG) surged more than 8% on Wednesday of this week as the company reported a solid "beat and raise" Q2. The stock added another 2% on Thursday, however sold-off about 6% on Friday.
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