Weekly Wrap Up
Markets were lifted late in the week after Egyptian President Mubarak finally resigned, as promised, alleviating fears by investors the global impact any continued political unrest would have. More Market News
Economic News
President Obama heaped praise on the peaceful protesters who deposed Hosni Mubarak on Friday, declaring, “Egypt will never be the same,” even as his national security team acknowledged that the swift uprising would almost certainly upend American strategy in the Middle East.
Standing in the foyer of the White House, where just a week before he had started to press Mr. Mubarak for immediate reforms without calling for his resignation, Mr. Obama described the Egyptian uprising as a model of nonviolence and moral force “that bent the arc of history.” While comparing the 18-day protests to Gandhi’s peaceful resistance to British rule, the fall of the Berlin Wall and the student protests that brought down a dictator in Indonesia, he also set out a series of benchmarks that he said he expected the Egyptian military to follow, warning that “nothing less than genuine democracy will carry the day.” (Source: New York Times) Click here to read the full article
Noah Freeman and Donald Longueuil, former junior portfolio managers at SAC Capital Advisors LP, were accused of insider trading while working at the $12 billion hedge fund in the latest round of charges stemming from a nationwide crackdown by federal prosecutors.
The allegations mark the first time in the 16-month U.S. probe that insider trading has been publicly alleged to have occurred at SAC Capital. Other former employees of the firm, and hedge funds started by SAC alumni, have been tied to the probe. (Source: Business Week) Click here to read the full article
The dollar lost ground Wednesday after a speech by Federal Reserve Chairman Ben Bernanke suggested that the central bank will keep interest rates at record lows and continue its $600 billion bond purchases.
The Fed chief said U.S. inflation remained tame, while the job market has improved but remains stressed, with a “more normal” level of unemployment still several years away. The government said on Friday that January unemployment fell to 9 percent. (Source: InvestorGuide) Click here to read the full article
Business News
Coca-Cola (KO: Charts, News, Offers) met Wall Street’s earnings expectations with profits that nearly quadrupled last quarter.
Coca-Cola, a component of the Dow Jones Industrial Average, said early Wednesday that its fourth-quarter profit soared to $5.77 billion, or $2.46 a share, up from from $1.54 billion, or 66 cents a share, a year earlier.
Excluding $5 billion in gains related to its acquisition of Coca-Cola Enterprises (CCE: Charts, News, Offers), the beverage company’s main bottler, adjusted earnings came to 72 cents a share, in line with analysts’ estimates. (Source: The Street) Click here to read the full article
Gannett Co. (GCI: Charts, News, Offers) call volume rose to a four-month high after AOL Inc. (AOL: Charts, News, Offers) agreed to buy the Huffington Post today, fueling trading in companies with online news operations.
More than 28,000 calls to buy the stock changed hands as of 4 p.m. in New York, 15 times the four-week average and eight times the number of puts to sell. The most-traded contracts were the July $20 calls, which accounted for about one-quarter of all call volume and rose 36 percent to 95 cents. McLean, Virginia- based Gannett gained 2.8 percent to $17.12. (Source: Bloomberg) Click here to read the full article
ConocoPhillips (COP: Charts, News, Offers) said Friday it will reward investors with a 20 percent dividend increase and a plan to buy back $10 billion of shares.
The Houston oil producer will pay 66 cents per share on March 1 to shareholders of record on Feb. 22. The share repurchase plan, if completed, would more than double the amount spent on buybacks last year. Repurchasing shares takes them off the open market and pushes remaining shares higher. (Source: ABC News) Click here to read the full article
Technology Focus
Apple’s (AAPL: Charts, News, Offers) second version of its iPad tablet computer has already entered production, according to the Wall Street Journal. Citing “people familiar with the matter” the paper claims that the so-called iPad 2 will be thinner and lighter, with at least one built-in camera for video chat, while sporting a significantly faster processor and more memory. Not much of a surprise there. Contrary to earlier rumors, it will also purportedly keep the same display resolution as the first model.
The new model will reportedly be sold through AT&T (T: Charts, News, Offers) and Verizon Wireless (VZ: Charts, News, Offers), suggesting the iPad 2 might use Qualcomm’s Gobi communications chip that supports both GSM and CDMA networks — which is found (with the GSM capability disconnected) in Apple’s Verizon-friendly version of the iPhone 4. (Source: Tech Spot) Click here to read the full article
Nokia Oyj (NOK: Charts, News, Offers), the world’s biggest maker of mobile phones, tumbled the most in almost 19 months on investor concern that a partnership with Microsoft Corp. (MSFT: Charts, News, Offers) won’t be enough in its battle with Google Inc. (GOOG: Charts, News, Offers) and Apple Inc.
Nokia, led by Chief Executive Officer Stephen Elop, unveiled plans today to make Microsoft’s Windows its primary software in the competition for smartphone customers against Apple’s iOS and Google’s Android platforms. Nokia’s shares fell 14 percent, the steepest slide since July 16, 2009. (Source: InvestorGuide) Click here to read the full article
The era of the plastic guitar dominating store shelves is approaching its end.
Activision (ATVI: Charts, News, Offers) announced it was cancelling a 2011 release of its massive music series Guitar Hero and breaking up the franchise’s business unit.
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“Given the considerable licensing and manufacturing costs associated with this genre, we simply cannot make these games profitably based on current economics and demand,” said Activision publishing chief Eric Hirshberg in a financial call to investors. “Instead, what we’ll do is focus our time and energies on marketing and supporting our strong catalog of titles and downloadable content.” (Source: USA Today) Click here to read the full article
Your Money
One of the wonderful things about being a coach is that I meet hundreds of executives who freely share their business and leadership challenges with me. As well as helping me understand how hard it is to run an organization, they show me how they are managing to adapt – or not – to changing organizational structures.
A constant theme during meetings over the last three years has been how globalisation and the economic crisis have forced organizations to rethink their strategies and change they way they operate. From what I can gather, much of this has been “on the hoof,” with companies switching their focus from markets to products or competitors, rather than looking at the big picture. This can result in lots of piecemeal change initiatives rather than looking at the overall organizational design. (Source: Harvard Business Review Blog) Click here to read the full article
I recently spent a couple days inside a large financial services company with a team that had been tasked with developing disruptive ideas. The team had been together for three weeks and had already come up with dozens of ideas. Members felt energized and were pleased with their progress.
While I thought many of the ideas were legitimately interesting, after a few hours of working together, a nagging concern began to creep in: that the team hadn’t quite formulated what question it was seeking to answer. (Source: Harvard Business Review Blog) Click here to read the full article
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Leo Sun is long-time market follower and finance writer. He regularly contributes to the Stock of the Day analysis.
