Retailers Drive Higher

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

After three days of advance, the market was in a quite mood. On a day when few earnings are reported fewer stocks are trading up. Tech stocks are trading higher on Motorola announcing to buy-back up to $4B of stocks. Most retailers reporting earnings traded better than 4%. Casinos stocks and shares of Apple, Yahoo and Pixar traded up more than 2%. Wal-Mart is conceding that it is better to have Netflix run its online DVD rental business, in the morning Netflix soared by 15% closing up 4%.

S&P – 0.47% DOW – 0.59% NASDAQ - 0.27%

Mixed trading pattern that began in the morning hours lasted all day. With more than 3% gain in major averages in three days, markets are expected to trade sideways for the rest of the week. The techs are traded higher on the announcement by Motorola, the company plans to buy back stocks worth up to $4 billion.

Mining, oil, refiners, and home builders were on decline whereas tech, Internet, casinos, and retailers were traded higher. But it was the day of retailers.

Children’s Place, Men’s Wearhouse, Ann Taylor, Stein Mart, Payless ShoeSource, Foot Locker, Claire’s Stores, Advance Auto Parts, New York & Co beat the market expectations. Men’s Wearhouse announced stock buy-backs and 3 for 2 split.

Initial jobless claims declined by a higher-than-expected 20,000 to 321,000 in the week ended May 14, according to figures released by the US Labor Department. The previous week’s figure was revised upwards from the earlier announced 330,000 to 341,000.

The Composite Index of Leading Economic Indicator dropped by 0.2% in April to 105.7. The April drop followed by revised 0.6% decline in March and 0.1% loss in February. The index is used to project the likely performance of the economy in the next three to six months.

The Conference Board reported, as reported by wire services, that five of the ten components of the leading index increased in April. They included average weekly initial claims for unemployment insurance, building permits, average weekly manufacturing hours, manufacturers’ new orders for non-defense capital goods and manufacturers’ new orders for consumer goods and materials. The components that fell were the index of consumer expectations, real money supply, interest rate spread, stock prices and vendor performances.

In Mid-morning trading in NY oil is trading up by 25 cents but still below $48 at $47.52 but the rally that lasted for the most part of the day lost its momentum towards the end of the day. Crude oil closed at $47 after climbing to $48 during the session.

Netflix stock closed up 4% after trading as high as 15% up. Wal-Mart Internet site is in agreement with the company to hand over its DVD rental subscriber base to Netflix. This is a significant victory as one of the best finance companies concedes the market place to Netflix. Blockbuster Entertainment is the only competitor in the market than has resources to change the competitive landscape. Blockbuster is in its own fight with current shareholders who prefer the company to not invest the allocated $170 million for the on-line venture.

Florida jury found Morgan Stanley to be negligent in case related to Coleman sale conducted for financier Perelman. Jury awarded including punitive damages of $1.4 billion. Morgan said the company will appeal the verdict. In the morning hours the stock was unchanged.

London based, third largest brewer, SABMiller reported 1Q profit of $1.032 per share on revenue growth of 0.7% and volume growth of 4%. The former parent, Altria can exercise its sale of 33 percent holding after the June 30 lock-up period expiration.

Foot Locker 1Q profit of 37 cents vs. 31 cents a year ago on 16% sales rise on 2.6% same-store sales rise for the quarter. Stock closed up 3%.

Petsmart, largest pet supply chain, reported 1Q profit of 30 cents vs. 21 cents a year ago on 13.4% rise in sales. The earnings included 3.5 cents one-time gain on legal settlement. Stock closed up 10%.

Advance Auto Parts, retail chain, reported 1Q earning of 87 cents vs. 83 cents on same-store sales on total sales rise of 12% on same-store sales growth of 9.2%. The company raised its 2005 earnings estimate to $3.04-$3.14.The current COO of the company to become CEO. Stock closed up 6%.

Mentor Corp, maker of breast implants, reported 4Q profit of 19 cents vs. 31 cents a year ago due to several one-time charges on 12% revenue growth. Excluding one-time charges the earnings would have been $1.40 per share. Stock closed up 2.2%.

Longs Drugs Store, California based drug store chain, reported 1Q profit of 34 cents vs. 25 cents a year ago on flat sales of $1.15 billion with same-store sales declined by 1.2%. Last year sales were impacted favorably by the California grocery strike. The company gave 2Q forecast of 30 to 39 cents. Stock rose 6.5%

Intuit, personal finance software maker, reported 3Q earnings of $1.61 vs. $1.33 a year ago on 20% revenue growth to $$849.5 million and net income of $300 million. The company forecasted full year profit between $1.96 and $1.99 on revenue between $2.01 and $2.02 billion. Stock closed down 2%.

Payless ShoeSource, shoe retailer, reported 1Q profit of 45 cents vs. 21 cents a year ago on slightly higher revenue and 2.3% same-store sales growth. The 4,646 store chain reported improved gross margin of 35.1% from 31.3%. Stock jumped 15%.

Stein Mart, discount apparel retailer, reported 1Q profit of 38 cents vs. 27 cents a year ago on 4.7% rise in sales and same-store-sales growth of 3.2%. 260-store chain pays annual dividend of 25 cents. The stock jumped 10%.

Ann Taylor reported 1Q profit of 24 cents vs. 43 cents a year ago on sales gain of 10% and same store-sales rise of 3.1% totaling to $476 million for the quarter. Stock closed up 2.5%.

Children’s Place Retail Stores, reported 1Q profit of 36 cents vs. 42 cents including one time charge of Disney inventory of 3 cents beating the estimates by 2 cents. 64% rise in total sales with same-store sales rise of 13% helped the company to surprise the market. Stock closed up 0.9%

Men’s Wearhouse reported 1Q profit of 69 cents excluding one time charges and 41 cents including charges vs. 42 cents a year ago on 14% rise in revenue. The company declared 3for 2 stock split and board authorized to buy shares up to $50 million. Stock closed up 12%.

Salesforce.com reported 1Q profit of 4 cents vs. breakeven a year ago on 84% jump in revenue to $64 million. For the full-year the company raised range from 11-13 cents to 11-14 cents on revenue range of $297 million -$302 million.

Claire's Stores, teen age accessories retailer, reported 1Q profit of 30 cents vs. 27 cents a year ago on 7.5% sales growth and same-store-sales up by 5%.

New York & Co. reported 1Q profit of 38 cents vs. 25 cents a year ago on 7% jump in total sales and 3.9% rise in same-store-sales.

The Bank of England's monetary policy committee believes that UK Chancellor has less than 20% chance of hitting its economic projections for UK.

According to UK newspapers average house in UK cost eight times average salary. Average house in South-West England costs app. $350,000 with average salary at $40,000 per household. During Blair government, housing prices have jumped 125% and salaries have jumped 18%.

In overnight trading, Asian markets closed higher on the rally in the U.S. Japan, South Korea and Australia jump more than 2%. Taiwan up 1.6%, Singapore and Thailand up 0.63%, India and HK closed up 0.5%.

Tech stocks rallied in Japan with Sony leading the sector and up by 4.6% followed by Tokyo Electron, Cannon, Matsushita Electric.

Altria, parent of Philip Morris, reported acquisition of third largest cigarette Indonesian company with the total cost as high as $5.2 billion.

HK Monetary Authority widened its currency band by 5 cents to HK$7.75-$7.85 per U.S. dollar. The authority hopes this widening of HK dollar peg after 22 years will discourage speculation in HK dollar in the hopes of rumored revaluation in Chinese Yuan.

Indian PC market registered 29% unit growth in shipment totaling to 3.6 million PCs led by 87% jump in notebook computers.