Finances

Despite its reputation as one of the highest quality cellular networks, Verizon Communications, Inc. (VZ) has experienced a series of service outages over the past month. The company has run a series of "Can You Hear Me Now?" ads touting the company's reliability.

Many Verizon customers have complained of a total loss of signal on the carrier's 4GLTE network. Some analysts have suggested that the third outage on Verizon's high-speed data network in December (and the fourth such outage during the year) threatens the carrier's image as America's "most reliable network."

In response to the December 29 network outage, Verizon issued a press release indicating that the company had proactively moved its 4G customers unto the 3G network to ensure they had a data connection. For the year, the carrier says the 4G network has been available approximately 99% of the time (equating to a loss of coverage of 3.7 days out of the year).

Customers unhappy with Verizon's recent service outages were given more reason to be unhappy after the carrier announced on December 29 that it would begin charging a $2 payment "convenience fee" to customers who make a single payment online or by phone (the fee would be waived for customers who pay by electronic check, paper check or enroll in autopay). By December 30th, the company announced it would not impose the $2 fee citing "customer feedback" as the reason.

Verizon touts its 4G network as "BY FAR the largest and the most advanced [4G] network in the world." According to press releases from the company, the 4G network is available in 190 U.S. markets with coverage availability to more than 200 million people.

Shares of Verizon Communications (VZ) closed the week at $40.12.

American Airlines Stock Hits Turbulence in Wake of Bankruptcy

AMR Corp. (AMR), the parent company of American Airlines, Inc., has seen a dramatic drop in the price of its stock during 2011. For the year, the company's stock dropped nearly 93%. The stock will be delisted on January 5th, though shares will continue to trade over-the-counter.

In November, AMR filed for bankruptcy to restructure its debts. According to analysts, the company has a series of weaknesses including poor cash flow, profit margins, deteriorating net income, a poor performance history and weak growth as to earnings per share.

Vicki Bryan, a bond analyst with Gimme Credit, projects another tough year for airlines. "We had a rebound in fare pricing earlier this year, but we started to lose that as demand faded," Bryan says. Even with level fuel costs she projects that "weaker pricing will challenge margins and profits" in the airline industry.

When AMR's bankruptcy is concluded, projections are that the company's stock will be worthless. AMR had warned traders that following most Chapter 11 cases, equity holders end up with "little or no recovery value from their investment."

On the final day of trading in 2011, shares of AMR Corp. (AMR) closed at $0.34 (down from its 52-week high of $8.89).

Amazon's Holiday Numbers, 2011 "Best Holiday Ever" For Kindle

Last week, Amazon.com, Inc. (AMZN) released its holiday sales numbers. According to the online retailer, 2011 was the "best holiday ever for the Kindle family" with customers purchasing millions of the various Kindle devices.

Through the month of December, Amazon reports that consumers purchased more than 1 million Kindles per week. The Kindle Fire is Amazon's best-selling, most gifted and most wished for product available on Amazon.com.

"We are grateful to our customers worldwide for making this the best holiday ever for Kindle," said Jeff Bezos, Amazon.com's founder and CEO. Bezos also noted that the Kindle device had proven a huge milestone for independent publishing as well.

Between Black Friday and Christmas Day, sales of Kindle books increased 175% over the same period in 2010. Christmas Day saw the largest day ever for Kindle Book downloads. The Kindle is an e-book reader that enables users to wirelessly shop for, download and read books, newspapers, magazines and other media.

Shares of Amazon.com, Inc (AMZN) closed the week trading at $173.10 per share.

The Dow started the week at 12,294 and closed at 12,218. The S&P 500 started the week at 1,265 and ended at 1,258. The NASDAQ started the week at 2,619 and finished at 2,605.

In 2011, concerns over sovereign debt dominated the bond markets. As U.S. Treasuries closed the year at a three-year high, European sovereign debt closed much lower over the course of the year.

Concerns over European debt drove interest in the U.S. debt. According to one recent media report, European debt by the end of 2011 was seen as having about the same status as "toxic" subprime mortgage bonds had several years ago.

"It's almost like 2008," said Anthony Crescenzi with Pacific Investment Management, comparing the holding of European sovereign debt to a few years ago when "banks and investors didn't want to be seen as having holdings... in subprime mortgages and other so-called toxic assets."

By year's end, nations like Italy have seen their government securities lose 5.7% for the year compared to a 9.6% return on U.S. Treasuries. The end of the year marks a three-year high for U.S. debt according to Bank of America Merrill Lynch.

The 10-year Treasury note yield finished the week at 1.87% while the 30-year Treasury note yield finished the week at 2.89%.

Freddie Mac released its final Primary Mortgage Market Survey (PMMS) of the year on December 29, 2011. The survey revealed that mortgage rates, which have been hovering near historic lows for eight consecutive weeks, ticked upward slightly from their all-time low in the prior week.

The PMMS reported that the 30-year fixed rate mortgage (FRM) averaged 3.95% this week. Last week the 30-year FRM averaged 3.91% and last year at this time it averaged 4.86%.

The average for the 15-year FRM also ticked up slightly over the past week. The 15-year mortgage averaged 3.24%, compared to 3.21 in the previous week. A year ago, the 15-year FRM averaged 4.20%.

Frank Nothaft, Freddie Mac's Vice President and Chief Economist responded to the latest mortgage survey saying: "Mortgage rates ended the year hovering near historic lows in an already affordable housing market." He noted that 5% of households indicated in December their intentions to purchase a home in the coming six months. This, Nothaft says, is the highest measure the U.S. has seen since last May.

The money market fund finished this week at 0.50%. The 1-year CD finished at 0.70%.