Last Friday, Chimera Investment Corporation (NYSE:CIM) fell by almost 3% to close at $2.95, also marking a 2.3% loss for the week. While the stock is still up 15.7% for the year, having been on an upward trajectory since early January, it has been rather volatile, trading between $2.51 and $3.12 in the past three months.
Stock Market News
JPMorgan & Chase Co. (NYSE:JPM), the biggest and most profitable US bank, closed at $44.57 last Friday, marking an 8.6% gain for the week. The stock surged 7% on 14 March, after the company's announcement that it has received regulatory approval for a 20% dividend increase. The company's rally also helped lead financial stocks in the Standard & Poor’s 500 Index (SPX) to a 5.9% gain.
Last Wednesday (14 March), wireless broadband operator Clearwire Corp. (NASDAQ:CLWR) announced that it has signed Cricket cell service parent Leap Wireless as a customer for its new network. According to Clearwire, the deal will see it supplementing Leap Wireless' own network with the fourth-generation Long Term Evolution technology over a five-year period. The news pushed up the stock by 2.1% to close at $2.19. There were subsequent gains in the rest of the week, with the stock closing at $2.27 on Friday.
The Dow Jones moved above 13000, to a level not seen since December 2007, and the S&P500 passed through 1400 for the first time since the summer of 2008 as inflation remained subdued and retail sales picked up. The technology sector saw the Nasdaq hit its highest level since late 2000.
Armour Residential REIT (NYSE:ARR) experienced a 3.36% drop last Friday, ending at $6.80. ARR, which has been trading above $7 from last December, has not dropped to this level since October 2011. This was primarily due to the company's announcement on Friday that it was commencing an underwritten public offering of 26 million shares of common stock. ARR said that it planned to use the net proceeds of the offering to "acquire additional agency securities as market conditions warrant and for general corporate purposes."
Last Friday, videogame maker Activision Blizzard Inc. (NASDAQ:ATVI) closed at $11.91, marking a 2.06% gain for the week. After bottoming out in early March, the stock is now down 3.17% for the year. The sharp drop of 2.25% on 1 March came about after the Santa Monica, Calif. game maker announced that it was cutting a tenth of its workforce, even though it pointed out that an overwhelming majority of the job cuts were not “related to game development”. Activision also emphasized that the layoffs have already been factored in its earnings forecast and will not affect its results this year.
Last Tuesday, pharmaceutical giant Merck & Co. (NYSE:MRK) posted its estimates of first-quarter profits, declaring that it would earn about 95 to 98 cents a share, excluding expenses associated to acquisitions and restructuring. This is slightly below the consensus estimate of $1.01 a share. The company also said that it expected its revenues this year “to be at or near 2011 levels on a constant currency basis. At current exchange rates, sales would be unfavorably affected by about 2-3%.” (Merck’s calculations are based on an exchange rate of $1.31/euro.)
Last Friday, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) fell by 15.7% to end at $52.59, also marking a 23% drop for the week. After rising to $70.65 in mid-February, the stock has been on the decline ever since. Stocks of the single-cup coffee machine maker slumped on Friday after Starbucks said that it would sell its own single-cup machine (Verismo).
After falling by around 2% on Wednesday as worries over the Greek debt swap deal weighed, equity markets recovered to end the week flat, depressed by data from China but with optimism injected by a better than expected US jobs report.
Early in the week, markets were dominated by a number of bearish factors:
Blackberry maker Research in Motion Limited (RIM) (NASDAQ: RIMM) continued its decline last week, ending at $13.79, a 6.4% drop for the week. Since peaking at $17.57 in mid-January, the stock has been on a downward trajectory. With the company facing increased competition from rivals such as Apple and Samsung, many analysts are starting to lower their expectations in the run-up to the company’s earnings announcement on 29 March.
Last Friday, Rite Aid Corporation (NYSE:RAD) closed at $1.67, marking an 18.44% gain for the week. (The stock is up 34.7% since the start of this year.) Initially, there was only slight trading activity. However, trading volume subsequently spiked sharply later in the morning. In the end, about 15 million stocks were traded last Friday, more than double its usual intraday average of about 7.5 million stocks. While there has not been any confirmation of any company-specific news, there were some rumors that Walgreen Co.
Last Friday, Microsoft (NASDAQ:MSFT) ended at $32, marking a 1.9% gain for the week. (The company’s stock is currently up 23% this year.) While there have been concerns that a slowdown in the European economy would hit both corporate and consumer tech spending, the software giant has produced consistently good returns for its stockholders.
Last Friday, Zynga Inc. (NASDAQ:ZNGA) rose over the past week after the online game company introduced a new Web gaming destination, where users can play its games away from Facebook. The company’s stock recently ended at $14.49, marking a 56.78% gain since the start of the year.
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.
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.