Facebook’s Sell Off, J. C. Penney’s Miss, and the Fiscal Cliff: Market Recap
The markets closed up Friday on Wall Street:
S&P 500: +0.17%, Nasdaq: +0.32%, Dow: +0.03%, Oil: +1.19%, Gold: +0.31%.
On the commodities front, Oil (NYSE:USO) rose to $86.10 per barrel. Precious metals were up with Gold (NYSE:GLD) climbing to $1,731.30 per ounce, and Silver (NYSE:SLV) climbing to $32.56 per ounce about 5 minutes after the bell.
Facebook (NASDAQ:FB) unlocked 229 million shares for trading last week, and as many investors predicted, employees and executives decided to cash in. Shares have slid nearly 14 percent since October 24, once again closing below $20 on November 9. Notably, chief operating officer Sheryl Sandberg has pocketed over $11 million dollars in pre-arranged share sells.
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Shares of J.C. Penney Company (NYSE:JCP) closed down 4.93 percent after reporting third-quarter results. Revenue fell a staggering 26.6 percent to $2.93 billion, but the company did manage to narrow its earnings loss to $0.56 per share, compared to $0.67 per share a year ago. This is the third consecutive quarter of losses for the retailer.
Ever since May, there’s been a $6.2 billion cloud hanging over JPMorgan’s (NYSE:JPM) head. However, CEO Jamie Dimon proves himself as a savvy a manager of risk as ever, this time curbing losses in his company’s share value with dividend hikes and massive share repurchases. On Thursday, the bank disclosed that regulators approved a buyback program of up to $3 billion, a step towards Dimon’s $15 billion buyback initiative he proposed in March.
Zipcar (NASDAQ:ZIP) had a strong day on the market, closing up 15.89 percent after posting third-quarter results that blew past analyst expectations. Meanwhile, Groupon (NASDAQ:GRPN) closed down 30.36 percent after its earnings release disappointed investors.
During European Central Bank President Mario Draghi’s news conference in Frankfurt on Thursday, he warned the 17 euro-based economies of the European Union that the currency still remained weak despite “improvements in investors’ confidence in the euro area.” However, Draghi expressed satisfaction at the region’s progress. He highlighted several factors indicating that the pressure on financial markets was lifting, including the return of United States money market funds to the region, and stated that the financial market confidence of the region had “visibly improved on the back of our decisions.”
“At the end of this year, we face a series of major decisions about how to pay our deficit down,” said President Barack Obama when he delivered a statement on the economy and the fiscal cliff on Friday afternoon. Reiterating that he was reelected to take action, Obama will be speaking with leaders from both parties, including House Speaker John Boehner, next week in order to address the mounting problems.
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