Top 10 News Items for 8/10-8/14: Fed Leaves Rates Unchanged; John Paulson Takes Massive Stake in BofA; Atticus to Close Main Hedge Funds
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Here is a recap of the top news items from this week on Wall Street:
1. The Fed left its key interest rates unchanged this week, confirming what Street players had been expecting. As is always the case, traders focused on the slightest changes in the language used by the Fed. A couple of important changes: economic activity is leveling out" from "the pace of economic contraction is slowing" and they also said they have "decided to gradually slow the pace" of Treasury securities purchases. Click here to see a side-by-side comparison of the most recent statement and the previous statement.
2. As we are now knee-deep in the highly-anticipated 13F season, we have numerous activists and hedge funds out with their updated quarterly holdings this week. The most notably new investment, so far, has been John Paulson's convicted bet in Bank of America (NYSE: BAC). Paulson, who made billions betting against the housing market last year, is now the fifth largest holder of the bank, owning more 1.94% or nearly 168 million shares. After the news came out late Wednesday, shares rallied nearly 9% to finish the week.
3. As Timothy Barakett, founder of Atticus Capital, put it "After 15 years of being singularly focused on building and managing Atticus, I believe it is time to reassess my future." The massive hedge fund announced that it will close its two funds and hand back about $3 billion to investors. At its height, Atticus' holdings soared to $20 billion.
4. The world's largest retailer, Wal-Mart (NYSE: WMT), reported its Q2 earnings on Thursday morning of this week. The company beat on earnings, missed on sales, and narrowed its FY10 outlook. Shares of Wal-Mart finished the week about 5% higher.
5. Late Friday, BB&T (NYSE: BBT) announced that it had reached a deal with the FDIC to purchase the deposits and branches of embattled Colonial BancGroup Inc. (NYSE: CNB). As several sources are indicating, the deal, if approved, would happen after Colonial BancGroup is put into receivership.
6. We had two successfully launched IPO's this week: Emdeon (NYSE: EM) and Starwood Property Trust (Nasdaq: STWD). After pricing at $15.50, the top end of its expected range, Emdeon moved higher to close the week at $17.25. Meanwhile, Starwood Property, which priced at $20, closed the week at $19.67.
7. Although the Q2 earnings season has now gone and passed, results from retailers are still trickling in this week. Besides Wal-Mart, we also got quarterly figures from JCPenney (NYSE: JCP), Macy's (NYSE: M), Nordstroms (NYSE: JWN), Kohl's (NYSE: KSS) and Abercrombie & Fitch (NYSE: ANF).
8. On Thursday just before the market was closing, Las Vegas Sands (NYSE: LVS) announced that it has completed an amendment to its $3.3 billion Macau Credit Facility, opening the door to a possible IPO for its Macau assets. The stock was halted to issue the news, and opened about 7% late in the day.
9. Ford (NYSE: F), proving its continually strengthening position in the now beleaguered US auto market, announced it is increasing North American production in Q3 and Q4 to respond to growing demand for new Ford products and to ensure dealers are well stocked with fuel-efficient vehicles eligible for the "Cash for Clunkers" program. The automaker boosted its Q3 production by another 10,000 units to 495,000 units. For Q4, Ford sees production of 570,000 vehicles in Q4, 33% higher than year-ago levels and 15 percent above Q3 production plan.
10. Earlier in the week, Toll Brothers (NYSE: TOL) reported preliminary homebuilding sales for Q3 of $461.3 million, down 42% from the same quarter last year and compared to the Street estimate of $377.06 million. Deliveries came in at 792 units, with backlog of approximately 1,626 units, marking
the first time in 16 quarters - dating back to FY 2005's fourth quarter - that its net contracts exceeded the prior year's same quarter. It also marked the first quarterly sequential unit increase in Toll's backlog in more than three years.
1. The Fed left its key interest rates unchanged this week, confirming what Street players had been expecting. As is always the case, traders focused on the slightest changes in the language used by the Fed. A couple of important changes: economic activity is leveling out" from "the pace of economic contraction is slowing" and they also said they have "decided to gradually slow the pace" of Treasury securities purchases. Click here to see a side-by-side comparison of the most recent statement and the previous statement.
2. As we are now knee-deep in the highly-anticipated 13F season, we have numerous activists and hedge funds out with their updated quarterly holdings this week. The most notably new investment, so far, has been John Paulson's convicted bet in Bank of America (NYSE: BAC). Paulson, who made billions betting against the housing market last year, is now the fifth largest holder of the bank, owning more 1.94% or nearly 168 million shares. After the news came out late Wednesday, shares rallied nearly 9% to finish the week.
3. As Timothy Barakett, founder of Atticus Capital, put it "After 15 years of being singularly focused on building and managing Atticus, I believe it is time to reassess my future." The massive hedge fund announced that it will close its two funds and hand back about $3 billion to investors. At its height, Atticus' holdings soared to $20 billion.
4. The world's largest retailer, Wal-Mart (NYSE: WMT), reported its Q2 earnings on Thursday morning of this week. The company beat on earnings, missed on sales, and narrowed its FY10 outlook. Shares of Wal-Mart finished the week about 5% higher.
5. Late Friday, BB&T (NYSE: BBT) announced that it had reached a deal with the FDIC to purchase the deposits and branches of embattled Colonial BancGroup Inc. (NYSE: CNB). As several sources are indicating, the deal, if approved, would happen after Colonial BancGroup is put into receivership.
6. We had two successfully launched IPO's this week: Emdeon (NYSE: EM) and Starwood Property Trust (Nasdaq: STWD). After pricing at $15.50, the top end of its expected range, Emdeon moved higher to close the week at $17.25. Meanwhile, Starwood Property, which priced at $20, closed the week at $19.67.
7. Although the Q2 earnings season has now gone and passed, results from retailers are still trickling in this week. Besides Wal-Mart, we also got quarterly figures from JCPenney (NYSE: JCP), Macy's (NYSE: M), Nordstroms (NYSE: JWN), Kohl's (NYSE: KSS) and Abercrombie & Fitch (NYSE: ANF).
8. On Thursday just before the market was closing, Las Vegas Sands (NYSE: LVS) announced that it has completed an amendment to its $3.3 billion Macau Credit Facility, opening the door to a possible IPO for its Macau assets. The stock was halted to issue the news, and opened about 7% late in the day.
9. Ford (NYSE: F), proving its continually strengthening position in the now beleaguered US auto market, announced it is increasing North American production in Q3 and Q4 to respond to growing demand for new Ford products and to ensure dealers are well stocked with fuel-efficient vehicles eligible for the "Cash for Clunkers" program. The automaker boosted its Q3 production by another 10,000 units to 495,000 units. For Q4, Ford sees production of 570,000 vehicles in Q4, 33% higher than year-ago levels and 15 percent above Q3 production plan.
10. Earlier in the week, Toll Brothers (NYSE: TOL) reported preliminary homebuilding sales for Q3 of $461.3 million, down 42% from the same quarter last year and compared to the Street estimate of $377.06 million. Deliveries came in at 792 units, with backlog of approximately 1,626 units, marking
the first time in 16 quarters - dating back to FY 2005's fourth quarter - that its net contracts exceeded the prior year's same quarter. It also marked the first quarterly sequential unit increase in Toll's backlog in more than three years.
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