Week in Review: April 18, 2008
A look back at the week that was.
Investors tripped over the bell Monday as banking giant Wachovia (WB) led financials lower on news of a quarterly loss and plan to raise capital through a new stock issue. Markets were able to make up their losses through the week as buyers jumped in as companies met or beat low expectations for earnings season, most notably tech bellwether Google (GOOG), Intel (INTC) and IBM (IBM). Financials moved higher as any news other than catastrophe was viewed as a positive sign, as evidenced by JP Morgan (JPM) and Citigroup (C).
Technically the SPX is standing right at the resistance level of 1390. A move through this level puts 1450 on the radar. Remain cautious, as the dislocation between stock and credit continues to widen.
The Four Sisters Performance
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Wachovia added further concern to financials on Monday morning as the company announced its plans to raise $7 billion in capital and slash its dividend after reporting a Q1 loss of $350 million. This news sent shares of the fifth largest U.S. bank slumping 10% in early trading. (4/14)
Also causing some concern to kick off the week is Goldman Sachs (GS) after the investment bank announced that it sold 100 million euros of senior debt at 65 cents on the euro. This sale marked the largest discount offered by a bank since the beginning of the credit crunch. (4/14)
Blockbuster (BBI) added some M&A activity to the market on Monday as the company offered to purchase retailer Circuit City (CC) for a 54% premium over Friday`s closing price. (4/14)
The labor department released their CPI and PPI results for the month of March this week. CPI saw a gain of 0.3% and a core rate increase of 0.2%, as higher energy prices were the main driver of the index's move. PPI also jumped higher as it posted a gain of 1.1% and 0.2% rise in the core rate. Climbing food and energy prices were key contributors to the results. (4/16)
Washington Mutual (WM) showed kick-started the week as the company reported a $1.1 bln loss in the first quarter. The Seattle-based bank cites a struggling economy and battered mortgage lenders for the poor results. (4/15)
JP Morgan reported a first quarter profit of $2.4 bln this week, down significantly from last year's record setting $4.8 bln. CEO Jamie Dimon referenced a challenging credit environment for the lower performance. (4/16)
Google reaffirmed itself an earnings powerhouse this week as the tech bellwether chalked up a 31% gain in first quarter profit compared to a year ago. The company also noted increased growth in customer use of sponsored advertising. (4/17)
Dow component Caterpillar (CAT) pleased shareholders before the bell on Friday as the company cited EPS of $1.45 for the quarter, compared to $1.23 a year ago. Strong demand from outside North America helped contribute to a 13% spike in quarterly profit. (4/18).
Market Movers: Winners & Sinners
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