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May.02
5:31 PM ET
Friday, 2 May 2008
Market 360: The Best and Worst of the Week for US Equities, Commodities, Currencies, and More
Posted By:Gina Francolla | Marc Briganti | Giovanny Moreano | Yolaiki Gonzalez | Ariel Nelson
Sectors:Oil and Gas

For the week ending Friday, May 9, 2008, the U.S. Markets were negative for the week, with the Dow falling more than 200 points on Wednesday, making it the biggest point drop since 4/11/08.  The markets’ tumble was led by disappointing quarterly losses from Fannie Mae (FNM) and AIG (AIG), with Financials being the worst performing sector for the week, falling by 6.30%.  Also, weak home sales data and a five-day consecutive record close in Crude Oil weighed on U.S stocks.

Next week the markets will watch for Consumer Price Index, the most indicative gauge of inflation, and Housing Starts, which will provide the status on the health of the housing markets.  The big companies reporting earnings next week include: Sprint Nextel (S), Wal-Mart (WMT), and Hewlett-Packard (HPQ).

Highlights:

Earnings:
-American International Group [AIG  Loading...      (%)   ]shares fell 17.86% for the week, after the company posted a first quarter net loss of $7.81 billion dollars or $3.09/share on write-downs of credit derivative securities. The company plans to raise $12.5 billion in new capital to cover some of its losses.
-UBS AG [UBS  Loading...      (%)   ] unveiled a first-quarter net loss of $10.9 billion. The Swiss bank also stated it will cut 5,500 jobs due to sub-prime related losses and announced that it would sell $15 billion in subprime mortgages to Blackrock (BLK).  UBS stock traded down 10.80% for the week on its disappointing earnings.
**In addition, Morgan Stanley [MS  Loading...      (%)   ], JPMorgan (JPM) and Lehman Brothers [LEH  Loading...      (%)   ] are also expected to announce cuts in their workforce.
-Fannie Mae’s [FNM  Loading...      (%)   ] first quarter net loss of $2.19 billion or $2.57/share was worse than expected, as the company missed analysts’ estimates by $1.76/share. The company also announced a plan to raise $6 billion in new capital through a public stock offering. Credit losses have led to a year-to-date decline of 30.44% in its stock value.
**On Thursday, Congress approved a broad financial package designed at assisting the ailing housing market, with a $300B federal guarantee as its centerpiece.
**Shares of both Fannie Mae (FNM) and Freddie Mac [FRE  Loading...      (%)   ] were down 5.73% and 7.16% respectively for the week on continued uncertainty over congressional efforts to reform the two agencies. 
Disney [DIS  Loading...      (%)   ] reported a 22% rise in its 2Q net income to $1.77 billion, mostly helped by strong growth in its media-networks, studio entertainment, and parks and resorts operations.  Disney’s shares rose 2.42% for the week.
-Marvel Entertainment [MVL  Loading...      (%)   ] shares jumped 7.2% on Monday after raising its full year earnings guidance from $1.35/share to $1.55/share as the debut of “Iron Man” brought the company an estimated gross of $100 million over the weekend. However, the company also reported a 3.4% drop for first-quarter net income to $45.2 million.
-MGM Mirage [MGM  Loading...      (%)   ] posted a 30% decline in 1Q net income, while the company’s CEO, Terry Lanni, said that the company might separate its casino and hotel operations.  MGM’s shares jumped 7% on the news, but finished the week up 3.37%.
-Cisco’s [CSCO  Loading...      (%)   ] third-quarter net earnings fell by 5.34% due to rising expenses as the company reported a net income of $1.77 billion compared with $1.87 billion a year earlier.   Cisco’s shares fell 4.71% for the week on negative results.
-Synchronoss Technologies [SNCR  Loading...      (%)   ] shares were down by 43% on Wednesday after the company reduced its outlook for 2008 and warned that the unlocking of the iphone hurt its revenue. The stock price fell below its 52 week low of $15.15. Synchronoss also posted a first-quarter net income increase of 16.8% to $4.31 million, but closed down 43.68% for the week on the gloomy outlook.
-D.R Horton [DHI  Loading...      (%)   ] noted a second-quarter loss of $1.31 billion or $4.14/share due to increased inventories and write-downs in assets.  DHI said that it closed on 6,719 homes in the latest quarter, compared with 9,792 homes for the same quarter a year ago. The company’s stock declined 5.24% for the week on the quarterly losses.
-Alpha Natural Resources’ [ANR  Loading...      (%)   ] net income tripled to $25.5 million helped by record-high coal prices.  Shares of ANR finished the week 15.69% higher. 

M&A, Deals, Corp Actions:
- Citigroup [C  Loading...      (%)   ] announced on Friday that it plans to eliminate around $400 billion in assets over the next two to three years in an effort to improve efficiency and profitability.  Citigroup shares ended the week down 10.46%.
-Yahoo’s [YHOO  Loading...      (%)   ] stock plunged 15% on Monday as Microsoft [MSFT  Loading...      (%)   ] withdrew its $47.5 billion bid, marking its biggest one-day percentage decline since July 2006. Meanwhile, Google’s [GOOG  Loading...      (%)   ] shares strengthened by 1.43% on the same day due to weakened competitive threats and a potential advertising partnership with Yahoo. Microsoft’s shares managed to move up 0.57% for the week
*Google is rumored to be exploring a deal with Yahoo to take partial control of its search engine advertising
-Shares of Sprint Nextel