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Euro Zone’s New Chapter — Friday’s IP Market Recap

A look back at this week in financial news

   
Euro Zone’s New Chapter — Friday’s IP Market Recap

IPMarketRecap Euro Zone's New Chapter    Friday's IP Market RecapThe biggest story of the week (and for much of the year) entered a new, seemingly positive chapter Friday when the 17 nations of the euro zone agreed on a new deal — what German Chancellor Angela Merkel called a “stability union” — to help save the euro and solve the European debt crisis.

The Dow Jones surged nearly 200 points on the plan, which drew out new measures, including putting the European Central Bank in charge of the European Union’s bailout funds. The movement was less a celebration and more an excited sigh of relief from U.S. investors hanging on every bit of news about its largest trading partner.

Still, the euro zone — and the rest of the world — isn’t out of the water yet, with other important matters to be hammered out. These include the IMF’s final role in the bailouts of troubled European nations, as well as the looming possibility of credit downgrades across most of the region. Until these and a host of other issues are resolved, Europe likely will continue to be a hotbed of uncertainty. However, investors ready to dip their toes back into the continent should be reassured that there’s still several safe ways to invest in the country as it figures out the road to recovery.

Wheeling. . .

Ford (NYSE:F) gave investors yet another reason to believe in Detroit on Thursday when it announced it would reinstate a dividend almost five years after it had dropped the quarterly payouts. At 2% (5 cents per share), Ford’s dividend yield isn’t anything to scream about, but it’s also nothing to sneeze at compared to the rest of the industry, with Toyota (NYSE:TM) and Honda (NYSE:HMC) paying out 1.7% and 1.9%, respectively. Ford’s stock value, on the other hand, should be a cause for concern — F shares are down almost 34% on the year.

Toyota’s shares, on the other hand, have held up fairly well – down only about 15%. However, investors high on the company were deflated a bit Friday when the company lowered its outlook for the fiscal year by more than half. The company expects profits and sales to be grossly lower for the year, with much of the damage coming from Thai flooding disrupting supply lines, as well as a strengthened yen.

. . .And Dealing

Deals perked up the retail and cloud computing sectors this week. German software company SAP (NYSE:SAP) bought up cloud player SuccessFactors (NASDAQ:SFSF) on Monday, causing several cloud companies’ stocks to jump as investors hoped to guess the next buyout winner. In October, Oracle (NASDAQ:ORCL) said it would buy out cloud company RightNow (NASDAQ:RNOW), and today the company still stands as a likely suitor for Netsuite (NYSE:N).

On Thursday, the focus switched to retail,which saw a pair of big deals. J.C. Penney (NYSE:JCP) announced it would buy an almost 17% stake in Martha Stewart Living Omnimedia (NYSE:MSO). The deal would put mini-stores doling Martha Stewart products in most of the retailer’s locations, as well as give J.C. Penney two seats on the MSO board. Talbots (NYSE:TLB) also jumped 70% that day on news of a $3-per-share buyout by private equity firm Sycamore Partners.

Looking Ahead

With December in full swing, InvestorPlace will be taking an ongoing look back at the year in financial news, as well as what investors should expect — and how they can wisely spend their money — in 2012. Readers can take a look back at the year’s top consumer tech innovations, or pick up a few year-end tax tips. Traders looking for longer-term picks can check out some attractive dividend. And anyone looking to invest for the very long term should read about these top 401(k) mutual funds for 2012.

Three Up for Friday

  • Diamond Foods (NASDAQ:DMND): Up 52.77% ($14.01) to $40.56.
  • Blue Coat Systems (NASDAQ:BCSI): Up 43.65% ($7.63) to $25.11.
  • United Continental (NYSE:UAL): Up 4.62% (91 cents) to $20.62.

Three Down for Friday

  • Pandora (NYSE:P): Down 5.08% (53 cents) to $9.90.
  • DuPont (NYSE:DD): Down 3.18% ($1.48) to $45.04.
  • Transocean (NYSE:RIG): Down 1.57% (69 cents) to $43.26.

As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.


Article printed from InvestorPlace Media, http://investorplace.com/2011/12/euro-zone-debt-crisis-ford-toyota-market-summary/.

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