Markets Down After 14k Friday
Markets fell sharply on Monday morning after the Dow Jones Industrial hit 14,000 on Friday. This was only the the 10th time in history the DOW closed above 14,000. Bill Stone, chief investment strategist at PNC Asset Management Group said “It started to look like things in the market are maybe getting a little ahead of themselves, compared to some of the data we’ve seen. He continued to say that the problems in Europe are also beginning to take it’s toll on the U.S. markets.
The Spanish Prime Minister, Mariano Rajoy, is being faced with calls to resign over a corruption scandal. Questions are arising over illegal payments made to himself and members of his party. Opposition leader Alfredo Peres, said “Rajoy should resign to make way for another prime minister who can re-establish strength, credibility and stability that Spain needs.” It is speculated that the payments where made each year over an 11-year span in the amount of roughly 25,000 euros, nearly 34,000 USD. The Prime Minster said “If someone believes that because of this harassment that I’ll lose spirit or abandon the task given to me by the Spanish people, then they are wrong. This government has set itself a task and I assure you it won’t be sidetracked.”
Herbalife shares were sinking quickly on news that the company is now facing a law enforcement probe. There have been 192 complaints filed against the company since The Post filed a Freedom of Information Act request with the FTC. The trouble started back in December when Bill Ackman shorted the company and accused them of being a pyramid scheme. The Post said “The FTC received complaints about false promises Herbalife made and the difficulty distributors has in collecting income owed and in getting refunds. Some, months and years before Ackman did so, told the FTC they believe the company is a pyramid scheme.”
Oracle announced Monday morning that they will be buying network equipment maker Acme Packet Inc for $2.1 billion. With this acquisition it will help Oracle to compete with Cisco Systems by enabling them to move data securely over internet networks. This is the largest deal the company has made since it purchased Sun Microsystems for $7 billion in 2010. Brian White, an analyst with Topeka Capital Markets, said “We have been expecting Oracle to make a bigger push into the networking market as convergence across the IT world appears to be inevitable and today’s deal supports this notion.”
Shares of Royal Caribbean were sinking on Monday as the company posted fourth-quarter results that were weaker-than-expected. They posted a net loss of $392.8 million, or $1.80 per share, on revenue of $1.81 billion. This compares with a profit of $36.6 million, or 17 cents per share, on revenue of $1.78 billion the same quarter last year. The company did say that demand has increased and they have had a jump in bookings for 2013.
That’s all for the day. We’ll see you back here tomorrow, loyal readers.
All the best,