Markets Add Gains on Week as Bernanke Speech Calms Investors (BAC, AAPL)
Posted on August 27th, 2011
Markets achieve gains on the week, led by Friday gains in response to Federal Reserve Chairman Ben Bernankes affirmation measures will be taken should the economy worsen. Top stories for the week included Warren Buffetts investment in Bank of America (BAC: Charts, News, Offers), sending shares up as much as 20%, and Apple (AAPL: Charts, News, Offers) CEO Steve Jobss resignation. He will stay on as Chairman of the Board.Wall Street finished the week wondering what the impact will be from Hurricane Irene, set to climb the East coast over the weekend, potentially bringing historic levels of damage to the New York City area.
Stocks Climb, Led by Techs, After Fed Speech Stocks climbed in choppy session Friday after after Bernankes speech raised hopes that the Fed may consider further stimulus measures to boost the economy during an extended policy meeting next month.The Dow plunged almost 220 points in a knee-jerk reaction immediately after Bernanke started his speech, but quickly pared their losses. (Source: CNBC)
Airlines move planes; airports prep for Hurricane Irene U.S. airlines have cut at least 1,000 flights and are moving airplanes out of the anticipated path of Hurricane Irene, while airports are taking steps to minimize damage from the storm.AMR Corps American Airlines is battening the hatches at our airport operations, said spokesman Ed Martelle.
We are laying in supplies, things like tarps to throw over computers and electronics should we shut down the terminals, and plywood so that if there is any glass damage we can move quickly to secure those areas, he said. (Source: Reuters)
Buffett’s Bank of America Stake Reaps $1.3 Billion Paper Profit on Day One Warren Buffett may have earned $1.3 billion in one day on his $5 billion investment in Bank of America Corp (BAC: Charts, News, Offers).The preferred shares Buffett’s Berkshire Hathaway Inc. (BRK.A: Charts, News, Offers) bought are worth about $3.53 billion, Phil Jacoby, chief investment officer at Spectrum Asset Management Inc. in Stamford, Connecticut, estimated. Warrants included in the deal are worth about $2.73 billion, based on Bank of America’s share price of $7.65 as of 4:15 p.m. in New York trading, said Clay Struve, a partner with Chicago-based CSS LLC. (Source: Bloomberg)
Ford, Toyota to work together on hybrid trucks A chance meeting in an airport lobby between the top executives of Ford Motor Co. (F: Charts, News, Offers) and Toyota Motor Corp. (TM: Charts, News, Offers) has evolved into a deal between the auto giants to jointly develop a gas-electric hybrid engine for pickups and sport-utility vehicles.The companies signed the agreement Monday to share development costs, saying they want to make the technology more affordable for customers and bring it to market faster, although it may be at least seven years before models will be ready to sell. Many details have yet to be worked out, but both said their respective vehicles would remain distinctive, even if they share the same drive systems. (Source: Salt Lake Tribune)
Wall Street Continues to Back Apple Even After Jobs Steps down As CEO Wall Street is practically unanimous in its verdict on the formidable tech giant Apple (AAPL: Charts, News, Offers) as Steve Jobs announced his resignation as CEO: The 19 major analysts who track Apple are staying bullish on Apple’s stock. Jobs announced on Wednesday evening that he was stepping down as chief but will remain as its board chairman. Chief Operating Officer Tim Cook is taking the CEO position.Although we value Steve Jobs vision and strategist, we believe that he has created a superior organization backed by talented engineers and managers who can execute product roadmaps and deliver growth, says C. Montevirgen, equity analyst at Standard & Poor’s who follows Apple. He is retaining his strong buy recommendation on the stock, with a 12-month price target of $455 a share. (Source: Forbes)
Google agrees to $500-million settlement over online drug ads Online search giant Google Inc. (GOOG: Charts, News, Offers) has agreed to pay $500 million to settle federal claims that it sold ads to online Canadian pharmacies that targeted U.S. consumers, leading to illegal imports of prescription drugs.Under the settlement, Google forfeited the revenue it received from the pharmacies plus the revenue those companies gained from their sales through Google’s AdWords program.
The Justice Department said the forfeiture was one of the largest ever in the United States. (Source: LA Times)
8 Management Lessons I Learned Working Under Steve Jobs The brilliance of Apple is that its really just a huge startup. Its engineer-focused with minimal bureaucracy, and respects its employees. Sustaining this culture through decades of growth is no easy task.With the news of Steve Jobs resignation, Tim Cook has some incredibly huge shoes to fill. (Source: Business Insider)
What Do You Want to Say Youve Done? Several years ago, I was talking with one of my colleagues about a project he was thinking about taking on. We were both solidly in the middle of our careers, but his evaluation of the possible project surprised me. He said, There are a limited number of things that Ill be able to say Ive done in my career, and Im just not convinced that this should be one of them.What struck me about this conversation is that it took a backward-looking perspective. That is, my colleague projected himself to the end of his career and looked backward over his contribution. (Source: Harvard Business Review Blog)
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