Top 10 News Items 7/18-7/22: Apple Smashes Q3 Estimates; Express Scripts to Buy Medco in $29.1B Deal; Earnings Season Coming In Hot

Here is a recap of the top news items from this week on Wall Street:

1. Although Apple (Nasdaq: AAPL) shares rose more than 7 percent this week, looking at the chart does not reflect absolutely blow-out earnings the company reported on Tuesday night. Apple posted Q3 EPS of $7.79, $1.99 better than the analyst estimate of $5.80, on sales of $28.6 billion. Analysts had been looking for sales of $24.92 billion. The company's guidance was conservative as usual: sees Q4 2011 revenue of $25 billion, versus the consensus of $27.7 billion. Sees EPS of about $5.50, vs. the consensus of $6.42. The company sold 20.34 million iPhones in the quarter, up 142% from last year. The company sold 9.25 million iPad, up 183% from last year. At the quarter end, Apple held $76 billion in cash and cash equivalents.

2. Express Scripts, Inc. (Nasdaq: ESRX) and Medco Health Solutions, Inc. (NYSE: MHS) announced Thursday morning they have entered into a definitive merger agreement. Under the agreement, Medco shareholders will receive $71.36 per share in cash and stock, or $29.1 billion. Shares of Medco rallied 14 percent on that day and another 3 percent to close this week's trading. ESRX shares rose 5 percent on Thursday and other nearly 4 percent on Friday.

3. Elsewhere on the earnings front: IBM (NYSE: IBM), BofA (NYSE: BAC), Coca-Cola (NYSE: KO), J&J (NYSE: JNJ), Goldman (NYSE: GS), eBay (Nasdaq: EBAY), Morgan Stanley (NYSE: MS), Microsoft (Nasdaq: MSFT) and GE (NYSE: GE).

4. Nalco (NYSE: NLC) shares jumped almost 25 percent on Wednesday following news it entered a merger agreement with Ecolab (NYSE: ECL). Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, Nalco's shareholders may elect to receive either 0.7005 share of Ecolab common stock per share of Nalco common stock or $38.80 in cash, without interest, per share of Nalco common stock.

5. Shares of InterDigital (Nasdaq: IDCC) jumped more than 60 percent this week amid news its Board of Directors have begun a process to evaluate possible strategic alternatives for the company, which may include a sale or other transaction. Possible suitors include Google (Nasdaq: GOOG) and Apple (Nasdaq: AAPL). Click here to read our full report.

6. IPO's were hot this week: Zillow (NYSE: Z) closed just over $34 this week after pricing at $20 and opening sharply higher at $60; SkullCandy (Nasdaq: SKUL) closed just under $20 after pricing at $20 and opening at $23; Francesca (Nasdaq: FRAN) closed at $27.65 on Friday after pricing at $17 and opening at $22.50.

7. Traders gobbled up shares of E*TRADE (Nasdaq: ETFC) this week following news the company's largest shareholder, Citadel, has urged the company to call a special meeting of its shareholders in order to consider and vote on steps aimed at maximizing the value for all shareholders.

8. Cat (NYSE: CAT) shares tumbled nearly 6 percent on Friday, losing about $4.5 billion in market cap, on the back of disappointing quarterly results. Reported Q2 EPS of $1.72, $0.07 worse than the analyst estimate of $1.79. Revenue for the quarter came in at $14.2 billion versus the consensus estimate of $13.52 billion. Sees FY2011 EPS of $6.75-$7.25, versus prior guidance of $6.25-$6.75 and the consensus of $6.96. Sees FY2011 revenue of $54-$56 billion, versus prior guidance of $52-$54 billion and the consensus of $55.72 billion.

9. Bipartisan talks on the US debt ceiling basically got nowhere this week. While politicians are considering a number of options, one headline from this week piqued Wall Street interest: S&P sees 50% chance of cutting US rating within next 3 months. Rep. John Boehner said it will be a "hot weekend in Washingon" on debt talks.

10. Gold held the $1,600 per ounce level this week, showing investors are still looking for a place to hide their money. Crude oil traded back to within the $100 per barrel level.

You May Also Be Interested In

• Walmart (WMT) PT Lowered to $130 at UBS on Investment Narrative's Competing Dynamics
• BofA Securities Starts Mobility Global (MBGL) at Neutral
• BofA's Hartnett sees dollar slump, risk selloff if bond intervention fails