Wynn Resorts (NASDAQ:WYNN) is currently undergoing a public dispute between its CEO Stephen Wynn and the company’s co-founder and largest shareholder, Japanese billionaire Kazuo Okada. In late February, the company’s board of directors, after going through a report on Okada’s activities in the Philippines that Wynn’s lawyers said may have breached US anti-graft laws, judged Okada to be an “unsuitable person,” invoking a clause in the articles of incorporation to redeem his 20% stake of the company.
Stock Market News
Mixed US economic data this week gave credence to Bernanke’s testimony, in which he said the US still faces tough times and unemployment is a big concern.
Though GDP in the fourth quarter was reported to have increased by around 3% annualized, and jobless claims fell to a two-year four week average low, a reduction of 4% in January’s durable goods orders and a fall of 4% in home prices through 2011 tarnished the good news.
Intel Corp. (NASDAQ:INTC), the world’s largest chipmaker, continued its stock rally in recent months, ending at $27.24 on 28 February (Tuesday). The stock has been on an upward trajectory since bottoming out last August. (Since the start of the year, Intel stock has gained about 11%.) Last month, the company reported a 6% growth in its profit in the last quarter, topping analyst expectations, even as hard-drive shortages held back PC makers' chip orders.
Yahoo Inc. (NASDAQ:YHOO) continued its downward trajectory in recent weeks. On 28 February (Tuesday), the company stock ended at $14.90, marking a 7.63% decline for the year. Yahoo’s latest financial results showed that the company was still losing ground in the battle for online advertising. Although in line with analysts’ expectations, earnings were down 5% in the latest quarter. Revenue in the latest quarter totaled $1.17 billion, marking the 13th straight quarter that the company’s net revenue has declined from the previous year.
Last Friday, satellite radio company Sirius XM Radio (NASDAQ:SIRI) closed at $2.20, marking a 2.56% gain for the week. Since the start of the year, the company stock has increased by 20.88%, continuing its rally since last October.
Earlier this month, Sirius XM met expectations on revenues and earnings per share. In 2011, the company posted net income of $427 million on revenue of $3b billion, although growth has been noted to have slowed. Sirius XM posted a profit of $71.3 million or 1 cent a share last year.
Last week, mobile giant Sprint Nextel Corp. (NYSE:S) reportedly abandoned a deal to acquire Texas-based wireless specialist MetroPCS Communications. The $8 billion deal was apparently vetoed at the last minute by the Sprint board, which was against paying what would have been a 30% premium for MetroPCS Communications. According to media estimates, Sprint would have paid about $5 billion, in return for 9.3 million new subscribers from MetroPCS to add to its own 52 million.
Since the start of the year, India’s benchmark Bombay Stock Exchange Sensitive Index has risen by 19%. The Market Vectors India Small Cap Index ETF (NYSEARCA:SCIF) is up 57.9% for the year. Indian stocks are now among the best-performing in the world, well off their lows last December.
Last Friday, advanced semiconductor company Micron Technology Inc. (NASDAQ:MU) closed at $8.43, marking a 6.64% gain for the week. From the start of the year, the stock has risen by 34.5%, after bottoming at $3.97 last October.
After the death of its former chief executive Steve Appleton in a plane crash in Boise, Idaho, the company, which has appointed Mark Durcan, the company’s former president and chief operating officer as the new CEO, has been providing assurances that there would be no major shifts in its corporate strategy.
Despite softening at the start of the week, markets ended higher by the close on Friday as they were buoyed by better than expected economic news here in the United States and a more positive outlook for a solution to the Greek problem by the end of the week.
On Monday (13 February), Apple (NASDAQ:AAPL) rose above $500, closing at $502.60. This marked the continuation of the stock’s upward trajectory since last November. (Since the start of the year, the stock has increased by 24%). Powered by the popularity of its mobile devices, such as the iPhone and iPad, the technology powerhouse continues to set records in the stock market. As noted by New York Times’ Economix blog last week, “with a market value of about $460 billion, Apple is worth more than Google, Goldman Sachs, General Motors, Ford, Starbucks and Boeing combined.”
Markets have been swung by a number of factors this week, and a firmer tone set by optimism over a Greek austerity and debt package settlement earlier in the week evaporated with general strikes and parliamentary resignations in Athens on Friday.
Economic news in the United States was generally more positive, with the four week average jobless claims number falling to a near three month low (366,000), and wholesale inventories rising by 1%, the strongest for three months.
Last week, the Baltic Dry Index (BDI), a measure of shipping costs across four vessel sizes, fell to 662 points, the lowest since August 1986. Since the start of the year, the BDI has fallen by 61%. (The index measures the demand for shipping capacity versus the supply of dry bulk carriers.) As the BDI shows the cost of transporting the major raw materials by sea, it is often seen as a good gauge of the global trade volume.
Last week, banking giant Citigroup Inc. (NYSE:C) announced that it was exiting the mortgage brokerage business, where many banks have been grappling with the fallout from the housing collapse. According to Citigroup, most of the 300 employees tied to the brokerage business will be reassigned. The company’s spokesman Mark Rodgers said that job “discontinuances” may be in the “low double digits”, and that Citigroup will now focus on its own retail and correspondent channels instead.
Last Friday, shares of Ford Motor Company (NYSE:F), a global automotive industry leader, rose by 4.16%, after the release of better than expected unemployment figures, which showed that the unemployment rate has fallen to a three-year low of 8.3%. Given that more people working means greater consumer spending, Ford, together with the other US automobile makers, experienced big jumps in their stocks last Friday.
The iShares FTSE/Xinhua China 25 Index Fund (NYSE:FXI), the ETF of Chinese stocks, ended last week at $40.48, marking a 1.38% gain for the week. The index fund, which has been on an upward trajectory since last October, has gained 16.15% since the start of the year.
Struggling to maintain the year’s upward momentum, market malaise was finally broken on Friday with news that unemployment hit its lowest rate for two years. Large increases in non-farm and private payrolls help the rate fall to 8.3%, and the Dow Jones rise 157 points on the last trading day of the week, a net gain of 202 points, or 1.59% for the week. The S & P 500 Index burst through resistance at 1325 to finish the week at 1344.90, a gain of 2.2%, whilst last week’s star, the Nasdaq 100, continued to out perform with a gain of 2.7% to 2529.17.
I just did this fascinating interview with Ike Iossif of marketviews.tv.
Ike interviews many people each week for his Marketviews.tv website, including myself, and has them categorized by methodology. These people are many of the top thinkers and traders when it comes to the financial markets, such as people like Frank Barbera and Dan Zanger who turned less than $30,000 into millions in less than a year.
Last Friday, West Texas Intermediate crude closed at $99.76 per barrel while Brent crude oil closed at $111.58 per barrel, marking a small gain over the preceding week. At the beginning of the week, oil prices rose modestly after the European Union announced its decision to impose an embargo on Iran’s oil exports. The EU said the embargo would be implemented over the course of several months to avert a sharp hike in oil prices, although Iran subsequently indicated that it may stop supplying oil to Europe immediately.
This morning before the start of trading on the New York Stock Exchange and Nasdaq Amgen (NASDAQ: AMGN) announced that it was purchasing biotech company Micromet Incorporated (NASDAQ: MITI) for a blockbuster $1.16 billion acquisition.
Micromet announced that it also agreed to the buyout and shareholders will receive $11 in cash per every share that they own.
Market fights its way forward as economic indicators turn mixed
US markets ended mildly stronger for the second week running, though struggling to remain in the black as mixed economic figures and concerns over European debt tempered Alcoa’s strong release early in the week.
Last year, hedge funds delivered one of their worst annual performances in recent years. According the Hedge Fund Research (HFR), the average hedge fund fell by 4.8% last year. Mr Charles Gradante, co-founder of Hennessee Group LLC, a hedge-fund adviser, said, “It was a disappointing year for hedge funds as they underperformed broad market returns for the second year in a row.” (In 2011, the Dow Jones Industrial Average rose by 5.5% and the S&P 500 fell by 0.02%.)
After having led a surge in bank stocks last Thursday, shares of Bank of America (NYSE: BAC) fell by about 2% the following day to end at $6.17. This was after initial market speculations that the Obama administration would provide more financial assistance to distressed homeowners failed to materialize. An Obama administration official came out to deny that there were plans for a trillion-dollar program to refinance home loans.
The New Year kicked off on a firm footing after the holiday season. With European markets moving markedly higher in thin volume upon traders’ return after their own New Year break, the US market followed suit and posted gains approaching 2% on Tuesday. However, the market couldn’t continue its momentum through the rest of the week as disappointing economic data from Germany and the Eurozone overshadowed numbers showing a continued expansion of economic fortunes in the United States.