Fall in Oil and Core CPI Drive Market Higher

123jump.com Staff
30 Nov, -0001
New York City

While April CPI of 0.5% was higher than 0.4% estimates the flat core CPI brought buyers to the market. Home builders such as Toll Brothers, Hovnaian, Lennar and Beazer registered better than 4% gains. Retailers continue to deliver positive reports, ANF, Talbots,NordStrom delivered better-than-expected but Borders Group, Hancock Fabric disappointed. Yum jumped by 2% and Borders disappointed market with a quarterly loss.

News on core flat core CPI put trades in buying mood even though broader CPI came in at 0.5% higher than expected 0.4%. At Mid-day market extended the early gains and traded at the best levels of the day.

Shares of Nordstrom are trading up $2.30, Toll Brothers, Hovnaian, Lennar and Beazer Homes are trading better than 4%.

Mining stocks such as Brazilian miner CVRD, Australian BHP and Phelps Dodge are trading higher on lower core inflation outlook. Overnight China reported brisk industrial activity and sees no sign of slow down.

Shares of Abercrombie & Fitch, Urban Outfitters and American Eagle were trading lower. ANF earnings came at better –than-expected, at 45 cents. Investors took profit.

Shares of Talbots and Hancock Fabric were trading on earnings news. Applied Materials share fell on gloomy outlook and lower earnings. Borders Group also disappointed the market with quarterly loss.

In London currency market Euro and British pound were steady against U.S. dollar.

At Mid-day, European shares trade higher with Germany, France and Denmark trading up more than 1%. Semiconductor and tech stocks are trading higher in UK and Germany, and London supermarket group reported sharp decline in operating earnings but said the comparable sales were up 1.7% during the quarter ending March.

Overnight Asian markets ignored the pressure from the U.S. treasury on China to revalue its currency. Tokyo edged up slightly after loosing 3.3% in the last seven trading sessions, HK ended lower on capital flight concerns related currency revaluation, Seoul ended higher on expected recovery in semiconductor sector Sydney closed higher on technical bounce and Mumbai closed lower on ruling against UBS from issuing any more derivatives related to the Indian markets.


Nordstrom reported 1Q profit of 75 cents vs. 48 cents a year ago on 8% total sales growth and 6.2% jump at same-stores sales. The company raised guidance for the full-year from $3.25/35 to $3.40/50.

Hancock Fabrics, fabric retailer, reported 1Q loss of 18 cents vs. profit of 4 cents a year ago on sales decline of 7%.

Borders Group, book seller, reported 2Q loss of 7 cents vs. profit of 3 cents a year ago on 2% revenue rise. The company blamed the loss to declining music sales and weak demand for best sellers. The company expects the same store sales growth at Borders to be in low single-digit and international location to be 26%-30%.

Abercrombie & Fitch reported 1Q profit of 45 cents vs. 30 cents a year ago on 33% rise in revenue beating the estimates by 3 cents. Same-store sales at Hollister division were up 21% and at Abercrombie were up 16%.

Applied Materials reported 2Q profit of 18 cents vs. 22 cents a year ago. The new orders fell 30% totaling $1.55 billion. Japan, Korea and China represented 33%, 13% and 9% and North America and Taiwan represented 18% each and Europe 9% of new orders.

Rediff.com, India based portal and publishing company, reported 4Q loss of 0.9 cents vs. 8.2 cents a year ago. For the year 2004 the company reported loss of 5.6 cents vs. 22.4 cents a year ago.

Yum Brands, parent of KFC, Taco Bell and Pizza Hut, reported that same-store sales during the last four weeks for U.S. restaurants open at least for a year were up 4%, higher than the analysts’ estimates of 2 to 3 cents.

Talbots, women’s apparel retailer, reported 1Q profit of 63 cents vs. 58 cents a year ago on same-store sales growth of 4.3% and total sales up of 8%.

Jack in the Box reported 2Q profit of 55 cents vs. 51 cents a year ago on 12% revenue growth and raised its outlook for the current year from $2.43 to $2.46 per share.