The Week in Greek — Friday’s IP Market Recap

A week ago, Europe had settled on a debt resolution for Greece, the Dow Jones industrial average was rising past 12,000 and the markets in general had some much-needed confidence pumped through their veins.

So much for that. What Europe giveth, Europe taketh away.

This week watched the Dow slide back under 12k as investors, euro zone leaders and the rest of the logical free world threw their hands in the air in exasperation and confusion Monday as Greek Prime Minister George Papandreou announced he would throw the debt resolution to a referendum in January, jeopardizing the highly contentious bailout deal.

The backlash was thorough and immediate. American markets dropped about 4% in one day, and global exchanges were sent reeling. By Thursday, Papandreou said he was backing off a referendum, but the damage — at least to his political future — was already done. On Friday, Papandreou was facing a confidence vote to his socialist party�s rule.

The week was especially tough on financials, which got to weather not only general economic uncertainty in Europe, but also the fallout from the Chapter 11 bankruptcy filing of broker MF Global (NYSE:MF), which had piled up almost $6 billion in debt of struggling countries including Italy, Spain and Portugal. On Friday, MF Global�s head was severed as Jon Corzine, a former New Jersey governor and past CEO of Goldman Sachs (NYSE:GS), stepped down.

Those were just a couple big headlines from this week in financial news.

Groupon IPO

Finally, Friday saw the long-awaited Groupon IPO, and it didn�t disappoint. GRPN issued 35 million shares priced at $20, which was above expectations, to raise $700 million in its initial public offering. The stock then proceeded to boom more than 30% throughout the day and finished at $26.11. Groupon�s activity, if nothing else, was a much-needed firework in an otherwise lackluster few months for public offerings.

Weekly Joe

A pair of nation-defining coffee companies made big news this week. Starbucks (NASDAQ:SBUX) announced a big earnings beat after the bell Thursday, with EPS of 47 cents for the fourth quarter versus analysts� estimates of 36 cents. The number is 27% higher than the year-ago period and was powered by 6% international growth and 10% domestic growth. SBUX shares took off Friday and ended the day up almost 7% at $44.19

Starbucks� recent deal with Green Mountain Coffee Roasters (NASDAQ:GMCR) also helped that company’s consumer products group, which increased revenues 20%. GMCR produces the popular single-portion K-cups under the Keurig brand, and Starbucks began distributing its coffee in K-cups this past quarter.

North of the border, Tim Hortons (NYSE:THI) announced it would be nosing in on Starbucks and Dunkin� Brands (NASDAQ:DNKN) by including lattes and other fluffy coffee drinks with its normal assortment of plain Joe and Timbits. The Canadian company is pairing the drink push along with its continuing stretch from Midwestern states outward toward the coasts. The market opportunity for specialty beverages is enormous — 20% per year, and Tim Hortons hopes to grab the attention of some of the 150 million Americans that drink espresso, cappuccino, latte or iced coffees.

Angry Mother Nature

This past weekend, an unusually major winter storm that targeted the Northeast knocked out power for more than 3 million Americans. Don�t expect that to end. Farmers� Almanac includes a gloomy winter forecast with plenty of cold and stormy weather. Of course, while that forecast doesn�t bode well on the average person, it also weighs on the American economy. Harsh winter weather can keep people from going to work, suck money from city budgets for seasonal snow removal and knock out valuable shopping days.

This week also saw Honda Motor Co. (NYSE:HMC) take one on the grille, not only because of aftereffects from the March earthquake and tsunami in Japan, but also because of massive flooding in Thailand, which has been persisting since July. The flooding� has shut down production for Honda, and also has impaired automotive facilities run by Toyota (NYSE:TM), Ford (NYSE:F) and General Motors (NYSE:GM). Other industries have been hard-hit as well, including computer disk-drive makers like Western Digital (NYSE:WDC), semiconductor makers like ON Semiconductor (NASDAQ:ONNN) and camera makers like Sony (NYSE:SNE) and Nikon.

Looking at Friday’s trading action:

Three Up
  • Hansen Natural Corp. (NASDAQ:HANS): Up 6.02% ($5.43) to $95.56.
  • ARM Holdings (NASDAQ:ARMH): Up 5.94% ($1.75) to $31.21.
  • China Petroleum & Chemical Corp. (NYSE:SNP): Up 4.78% ($4.64) to $101.65.
Three Down
  • Chesapeake Energy (NYSE:CHK): Down 6.75% ($1.96) to $27.07.
  • Bank of America (NYSE:BAC): Down 6.08% (42 cents) to $6.49.
  • LinkedIn (NYSE:LNKD): Down 5.86% ($5.13) to $82.37.

As of this writing, Kyle Woodley did not own a position in any of the aforementioned stocks. Check out recaps from previous trading days here.

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