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Bob Carey
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  US Stocks Week Ended November 4, 2011
Posted Under: Weekly Market Commentary


Last week's markets and headlines were driven by two outstanding issues, Greece's instability and the default of MF Global. Initially, it appeared an agreement was in place to stabilize Greece by giving the country's debt a 50% haircut and expanding the bailout fund to €1 trillion. However, markets were negatively surprised when George Papandreou, Greece's Prime Minister, announced plans to hold a referendum to approve the measures. Under pressure from the EU, Papandreou would back away from his planned referendum adding some relief to an already weary market. On Monday, Wall Street brokerage firm, MF Global, announced its bankruptcy. MF Global 's collapse is the largest since Lehman Brothers in 2008. The firm's insolvency is believed to be caused by leveraged bets that Italian and Spanish sovereign bonds would increase in value. In its bankruptcy filing, MF Global disclosed it had approximately $1 billion in equity supporting $40 billion in assets. On Wednesday, Abercrombie and Fitch fell 19.93% after announcing slowing same store sales at its European, Canadian and Japanese stores. Thursday, Starbucks reported better than expected earnings beating the Street by one cent with $.37 normalized EPS. The stock responded favorably advancing 6.74%. Also doing well was energy company, Canadian Natural Resources. Canada's second largest energy company grew earnings over 40% from last year causing shares to surge 9.3%. On Friday, the much awaited IPO of Groupon made its debut. Shares initially priced at $20, opened trading at $28, reaching as high as $31.14 before closing at $26.11, giving the company a 30.55% gain on the day. Looking ahead, next week is Election day and Veterans Day in the States, China will announce its trade balance, General Motors, Green Mountain Coffee, Kohl's, and Petrobras will all report earnings.

Posted on Tuesday, November 8, 2011 @ 3:58 PM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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