Wall Street Opens Higher on Retail Sales Report

Arthi Gupta
14 Aug, 2012
New York City

U.S. indexes edged higher after retail sales rose unexpectedly and PPI climbed in July. Scotiabank agreed to acquire a 51% stake in Colombia-based Colfondos AFP. Teleflex agreed to acquire assets of LMA Intnl for $276 million.

[R]1:15 PM New York – U.S. indexes edged higher after retail sales rose unexpectedly and PPI climbed in July. Scotiabank agreed to acquire a 51% stake in Colombia-based Colfondos AFP. Teleflex agreed to acquire assets of LMA Intnl for $276 million.[/R]

Stocks on Wall Street opened higher after retail sales rose in July and France and Germany reported better than expected economic growth.

The market sentiment was mildly positive after economic activities across the euro zone contracted less than expected and France recorded zero growth for the third quarter in a row.

Among earnings, Home Depot gained 2% after the home-improvement retailer reported slightly better than expected earnings and Groupon (GRPN) plunged 22% after the daily-deals site reported lower than expected sales.

Of the retailers reporting earnings, Michael Kors (KORS) soared 15% after the designer apparel retailer lifted its annual earnings outlook and Saks (SKS) reported smaller than expected quarterly loss. TJX (TJX), the discount retail store raised its full-year earnings outlook.

U.S. Retail Sale Rise

U.S. retail sales rose unexpectedly in July, according to data released by the U.S. Commerce Department today.

Overall U.S. retail sales rose to a seasonally adjusted level of $403.9 billion in July, an increase of 0.8% from the previous month and 4.1% above July 2011.

Excluding both the automotive and gasoline sectors, retail sales for July rose 0.9%.

U.S. PPI Climbs

The seasonally adjusted producer price index rose 0.3% in July, following a 0.1% increase in June, the U.S. Bureau of Labor Statistics reported today.

The producer price index for intermediate materials, supplies, and components fell 0.9% in July, the fourth consecutive decline.

Teleflex to Buy LMA International

Teleflex Incorporated signed an agreement to acquire substantially all of the assets of LMA International N.V. for $276 million.

The proposed acquisition will expand Teleflex’s anesthesia franchise, and in laryngeal masks.

Scotiabank to Acquire Stake in Colfondos

Scotiabank agreed to acquire a 51% stake in Colfondos AFP, Colombia's fourth largest pension fund company. The terms of the transaction were not disclosed. After completion of the transaction, Mercantil Colpatria will retain 49% ownership in the firm.

Pfizer to Acquire OTC Rights for Nexium

Pfizer inked an agreement with AstraZeneca to buy the over-the-counter rights for NEXIUM, a prescription drug approved to treat gastroesophageal reflux disease, for $250 million.

Under the terms of the agreement, Pfizer will acquire the exclusive global rights to market NEXIUM for the approved over-the-counter indications in the United States, Europe and the rest of the world.

Earnings Review

Flowers Foods, Inc. ((FLO)), the bakery products producer said second quarter sales rose 6.1% to $681.56 million compared with the second quarter of 2011. Net income improved to $28.4 million, from $28.21 million last year, while quarterly earnings per diluted share remained unchanged at 21 cents.

Michael Kors Holdings Ltd. ((KORS)), the luxury lifestyle brand reported first quarter total revenue increased 71% to $414.9 million from the first quarter of fiscal 2012. Net income available for ordinary shareholders soared to $68.6 million or 34 cents per diluted share compared to $18.92 million or 13 cents per share last year.

Net income was $68.6 million, or $0.34 per diluted share, based on 199.4 million weighted average diluted shares outstanding. Net income for the first quarter of fiscal 2012 was $24.1 million, or $0.13 per diluted share, based on 179.2 million weighted average diluted shares outstanding.

Nationstar Mortgage Holdings Inc. ((NSM)), the residential mortgage loan servicer reported second quarter total revenues rose 24% to $200.05 million from last year. Net income in the quarter surged to $36.3 million or 41 cents per diluted share compared to $1.7 million or 2 cents per share in the second quarter of 2011.

The Home Depot, Inc. ((HD)), the home improvement retailer said second quarter sales increased 1.7% to $20.6 billion on comparable store sales rise of 2.1%. Net earnings for the quarter rose to $1.5 billion or $1.01 per diluted share compared with net earnings of $1.4 billion or 86 cents per diluted share, in the same period of fiscal 2011.

Towers Watson & Co. ((TW)), the professional services company said fourth quarter revenues dropped 3% to $826 million from the comparable quarter a year ago. Net income attributable to controlling interests for the quarter rose to $65 million or 91 cents per diluted share from $44 million or 59 cents per share in the same quarter a year earlier.

For the full year, revenues were $3.42 billion, an increase of 5% from $3.26 billion in fiscal 2011. Net income attributable to controlling interests was $260 million for the full year.