Summary: Eyes were on the bond market for any signs the surprise departure of PIMCO founder Bill Gross will impact the fixed income sector; Stocks rally back with Apple, techs leading the charge. Conway G. Gittens reports.
Forget about stocks, bonds were the story of the day. Bond king Bill Gross, founder of the world's largest bond fund, leaving his PIMCO Total Return Fund to work for rival, Janus. Russ Kinnel follows the fund industry for Morningstar. SOUNDBITE: RUSS KINNEL, DIRECTOR OF MANAGER RESEARCH, MORNINGSTAR (ENGLISH) SAYING: "I thought it was April Fool's Day. There is no way that could possibly happen. It's one of the most shocking bit of news I've heard. It's not so shocking, if say we heard, he was going to retire in 12 months but that he is leaving immediately and for Janus. He is going to run a $13 million fund after running after a $230 billion fund. It's as shocker." The 'adios' comes at a tumultuous time for PIMCO. There's a Securities and Exchange investigation, according to the Wall Street Journal and last year its flagship fund clocked in its worst performance in nearly two decades. Bond yields moved up on fear this shake-up could rattle the market. John Manley of Wells Fargo Advantage Funds expects any fluctuation to be short lived. SOUNDBITE: JOHN MANLEY, CHIEF EQUITY STRATEGIST, WELLS FARGO ADVANTAGE FUNDS (ENGLISH) SAYING: "I can't imagine people saying 'I love the bond market when Bill Gross was here but I don't love it when he's there.' So even though he's made tremendous accomplishments and certainly deserves the attention he gets, I'm not sure anyone can influence the market for more than a few days by moving around." But this is also a stock story. PIMCO is a unit of Germany's Allianz and that stock slumped 6 percent, while Janus shares pulsated to their highest since 2010. Other asset managers like Legg Mason and BlackRock also jumped on the news. As for the broader market, stocks recovered some lost ground after the biggest sell-off since July a day earlier. For the week: the Dow lost a full percent, while the Nasdaq shed 1.5 percent. Starboard looking to shake things up at Yahoo. The activist investor acquired a stake and wants Yahoo to cut costs and strike a deal with AOL. Shares of Yahoo and AOL rallying after the open letter to Yahoo CEO Marissa Mayer. Apple finally defending iPhone 6 plus after days of criticism over the gadget bending in pant pockets. Apple also rolling out a second fix to its iOS 8 operating system. Shares ending higher after a tumultuous few days. Speaking of higher: Nike rallying to a record one-day after posting better-than-expected sales and profits. BlackBerry making good on its turnaround plan with a smaller loss and larger sales. On the macro front: second-quarter U.S. growth upwardly revised to show the fastest pace of growth in 2-1/2 years. In Europe, a mixed picture due to that big drop in shares of Germany's Allianz.