Tesla Slows Down and Cisco Takes Microsoft to Court: Market Recap

Markets declined on Wednesday, ostensibly weighed down by ongoing concerns that the U.S. Federal Reserve could curb quantitative easing in the coming months as the economy improves.

DJIA: -0.69% to 15,302.80 S&P 500: -0.70% to 1,648.36 NASDAQ: -0.61% to 3,467.51
Gold: +$14.80 to $1,393.70 per ounce Oil: -$2.12 to $92.89 per barrel U.S. 10-Year: -0.048 to 2.117%

Has Soaring Consumer Confidence Boosted Retail Sales? After plummeting in March — when Americans worried about the effects of the automated government budget cuts — Consumer confidence has soared this month, hitting its highest reading since February 2008. Fueling the increase is consumer positivity about current business and job-market conditions. As evidence of the improving labor market, the Labor Department reported last week that there were fewer claims for unemployment benefits. While this growing confidence has not fully translated to an increase in consumer spending and therefore retail sales, recent figures have not been as dismal as they were in March and April… (Read more.)

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Do You Believe the Housing Bubble Hype? Data released this week suggests that the housing market continues to improve, although rapidly rising prices have fueled concerns that another bubble may be inflating. To ward against these concerns, Trulia has launched a feature called Trulia Bubble Watch. The indicator tracks whether home prices are in or nearing bubble territory by measuring how home prices are valued relative to their fundamentals… (Read more.)

Here’s your Cheat Sheet to today’s top stock stories:

Cisco (NASDAQ:CSCO) headed to court in Europe on Wednesday in an attempt to split Microsoft (NASDAQ:MSFT) and the popular video-chat website Skype. Microsoft purchased Skype for $8.5 billion in 2010, but didn’t make any concessions to the European Commission when it made the deal, and it is on those grounds that Cisco believes the deal should be annulled… (Read more.)

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Tesla (NASDAQ:TSLA) closed the day down 5.71 percent, its first daily loss since last Thursday. Shares are up more than 100 percent over the past month, riding a wave of momentum that began on May 8 when the company reported its first profitable quarter of earnings. Wednesday’s decline suggests that some investors feel like shares have finally overheated, although others argue that a short squeeze is still in effect… (Read more.)

Apple (NASDAQ:AAPL) CEO Tim Cook addressed several questions related to the iPhone and iOS 7 at the All Things D conference in Palos Verdes, California, this week. Although the CEO was tightlipped as usual about any specific details regarding Apple’s next generation of its flagship phone, he did drop several tantalizing hints about the general future of the iPhone… (Read more.)

Sallie Mae (NYSE:SLM) made a few significant announcements on Wednesday. The student loan company announced that it has appointed John Remondi as CEO effective immediately following the advanced retirement of Albert Lord. In addition to this, the Board authorized the company’s management to pursue separation of the company’s existing businesses into two, separate, publicly traded entities — an education loan management business and a consumer banking business — to unlock value and enhance long-term growth potential.

Nasdaq OMX (NASDAQ:NDAQ) will be fined $10 million for botching the Facebook (NASDAQ:FB) initial public offering following a decision by the U.S. Securities and Exchange Commission. The SEC determined that the exchange made poor decisions ahead of and during the IPO that resulted in many of the trading errors that plagued the stock’s debut… (READ MORE.)

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Smithfield Foods (NYSE:SFD) announced on Wednesday that it has agreed to merge with Shuanghui International Holdings in a deal that values the meat products company at approximately $7.1 billion. The merger will include the assumption of Smithfield Foods’ debt. Shareholders will receive $34.00 per share, a premium of approximately 31 percent over the stock’s closing price on May 28… (Read more.)

Michael Kors Holdings (NYSE:KORS) closed the day up 3.18 percent after reporting fourth-quarter and fiscal-2013 financial results. The luxury designer and retailer reported that fourth-quarter revenues increased 57.1 percent on the year to $597.2 million, while comparable-store sales increased 36.7 percent. Reported earnings increased 123.9 percent to $0.50 per share. Gross profit margin increased from 57.7 percent in the year-ago period to 59.7 percent. First-quarter earnings are expected to be in a range between $0.46 and $0.48 per share.

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