Dow: 13,125 (-0.25%) S&P 500: 1,410 (-0.05%)
The unofficial last week of the summer – for financial firms, this means an increase in office pranks and a decrease in the number of employees showing at work (many of whom would be the target of said shenanigans). But this historically slow market week will be capped by Federal Reserve Chairman Ben Bernanke’s speech on Friday from Jackson Hole, Wyoming and investors are hoping for stimulus news. For now, stocks drifted and the Dow slipped 33 points today as investors’ reactions to the weekend’s major Apple/Samsung court battle stole headlines. Meanwhile, the Fed reported that manufacturing activity in the Dallas region contracted slightly (but less than the previous month), while Tiffany earnings surprised.
Samsung forced to pay Apple $1 billion for infringing iPhone patents
We can’t get enough iPhone finger acrobatics – Spread to zoom, pinch to zoom out, bounce back at the bottom when you’ve scrolled too far. We love that s**t. On Friday, the US Federal Court ordered that Samsung pay Apple $1 billion for stealing these Steve Jobs’ technologies and using them in their own phones. By infringing on 6 of Apple’s patents, i.e. stealing Apple’s intellectual property, Apple suffered $1 billion in damages through should-have-been iPhone sales that went to Samsung instead. Apple rose 2% today to another record high and Samsung fell 7.5%. As if Apple needed any more assurance that it was firmly seated at the top of the tech totem pole. The decision fortifies Apple’s growing dominance in wireless and even Google is being forced to question its efforts to gain share in the smartphone market, driven by their Android platform (if you’ve used a DROID you’ve noticed how it copies iPhone-like Apple’s the cool older sister). Friday’s verdict even ruled that Samsung couldn’t use the iPhone style application icons. Even if you find it ridiculous that Apple can patent such basic design elements as the appearance of app icons (they’re just squares for Christ’s sake), the court verdict signals that they can – when Apple says not to steal its style, the tech world shall listen.
Tiffany jumps on too low earnings expectations
The 2nd quarter earnings season continues to slow this week with just a few major firms announcing the state of their balance sheets. Today’s gem was Tiffany (TIF) – the luxury jeweler reduced its outlook for the rest of the year and added that same-store sales were slowing…but the stock managed to jump over 7%. How? The answer lies in expectations. With the retailer already down 12% this year as of last Friday, analysts’ forecasts were extremely low. Because they expected a much worse hit to Tiffany’s earnings, the stock was rewarded as investors bought it up, even if shares don’t come in pretty blue boxes.
M&T buys another bank, IBM purchases software maker
It may not be as sexy as expensive Tiffany’s jewelry or really expensive Apple gadgets, but corporate mergers & acquisitions can move markets – and today had its fair share of noteworthy developments. First, Buffalo, NY-based M&T Bank (MTB) (famous for their Sabres/Bills-inspired checking account designs) bought Hudson City Bancorp (HCBK) for $3.7 Billion, adding new franchises along the East Coast (both stocks jumped on the news). Business giant IBM (IBM) then sent Kinexa (KNXA) shares up over 40% on an announcement that they plan on buying the software maker for $1.3 Billion.
- S&P Case/Shiller Home Price Index for June
- The Republican National Convention kicks off after Monday’s hurricane delay
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