U.S. Stocks Up; Wal-Mart Net Rises

Arthi Gupta
17 Aug, 2010
New York City

U.S. stocks rose on better-than-estimated earnings from Wal-Mart and Home Depot. Producer Prices rose 0.2% and housing starts increased 1.7% in July but homebuilder confidence fell in August. Potash Corp. board rejected BHP Billiton''s $130 per share proposal.

[R]9:35 AM New York – U.S. stocks rose on better-than-estimated earnings from Wal-Mart and Home Depot. Producer Prices rose 0.2% and housing starts increased 1.7% in July but homebuilder confidence fell in August. Potash Corp. board rejected BHP Billiton''s $130 per share proposal.[/R]

U.S. stocks advanced on positive earnings, Asian markets traded mixed and European markets gained.

The Labor Department released a report today reflecting a modest increase in producer prices in July, after reporting decreases in producer prices in the three previous months. P

Producer price index rose 0.2% in July following an unrevised 0.5% decrease in June. Core producer prices excluding food and energy prices grew 0.3% in July after edging up 0.1% in June.

Housing starts showed a notable increase in the month of July, according to a report released by the Commerce Department today. But the annual rate of housing starts came in below estimates due to a downward revision to the data for June.

The report showed that housing starts rose 1.7% to an annual rate of 546,000 in July from the revised June estimate of 537,000. The Commerce Department further added that building permits fell 3.1% to an annual rate of 565,000 in July from the June rate of 583,000.

Homebuilder confidence unexpectedly dropped for the third consecutive month in August, according to the National Association of Home Builders report released on Monday. Furthermore, the index of homebuilder confidence fell to its lowest level since March of 2009.

The report showed that the NAHB/Wells Fargo Housing Market Index edged down to a reading of 13 in August from a reading of 14 in July.

The index of current sales conditions dipped to 14 in August from 15 in July, while the index of sales expectations for the next six months dropped to 18 from 21. But, the index gauging traffic of prospective buyers remained flat at 10.

Potash Corporation of Saskatchewan Inc. announced that its board received and unanimously rejected an unsolicited proposal from BHP Billiton Limited to enter into a transaction under which BHP would purchase Potash for $130 per share in cash.

PotashCorp said its board reviewed BHP Billiton''s unsolicited proposal with the assistance of its independent financial and legal advisors and concluded that the proposal is grossly inadequate and it is not in the best interests of its shareholders.

Earnings Review

Abercrombie & Fitch Co. ((ANF)), the teen apparel retailer reported second-quarter net sales increased 17% to $745.8 million from $637.2 million in the year ago quarter. Net income generated in the quarter was $19.5 million or 22 cents per diluted share, compared to a net loss of $26.7 million or 30 cents per share in the year-ago quarter.

Agilent Technologies Inc. ((A)), the scientific instruments maker said net revenue for the third quarter rose 31% to $1.38 billion from $1.06 billion in the same quarter last year. Net income generated in the quarter was $205 million or 58 cents per diluted share, compared to a net loss of $19 million or 6 cents per share for the year-ago quarter.

The Home Depot, Inc. ((HD)), the home improvement retailer stated second-quarter net sales edged higher 1.8% to $19.41 billion from the previous year''s revenue of $19.07 billion on comparable store sales rise of 1.7%. Net income in the quarter rose 6.8% to $1.19 billion or 72 cents per diluted share as against net income of $1.12 billion or 66 cents per share a year-ago quarter.

Urban Outfitters, Inc. ((URBN)), the lifestyle specialty retailer reported second quarter net sales increased 20% to $552.0 million from $458.6 million in the same quarter last year. Net income in the quarter surged 46% to $71.7 million or 42 cents per diluted share compared to net income of $49.0 million or 29 cents per share in the prior-year quarter.

Wal-Mart Stores, Inc. ((WMT)), the retail stores operator stated second quarter net sales rose 2.8% to $103 billion from $100 billion last year on comparable store sales decline of 1.8%. Net income in the quarter grew 3.6% to $3.59 billion or 97 cents per diluted share compared to net income of $3.47 billion or 89 cents in the prior-year period.