Latest Read on GDP Positive

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

Latest read on 1Q GDP growth of 3.5% from Commerce Department put traders at ease. The lower trade deficit in March and strong consumer spending kept the U.S. economy humming at higher rate than 3.1% as expected in March read. The economy appears to be resilient to oil shock for now.

Positive opening of the market is facing sell-off from traders. The latest read on GDP of 3.5% from Commerce Department helped to relieve concerns on economic slow down, however the report left several inflation related measures unchanged.

Tech, finance, healthcare and home builders remain in the positive territory. Toll Brothers report on earnings charged home builders stocks. In the early morning stocks of Toll Brothers are up $4.30, Ryland up $2.46, Beazer Homes up $2.26, Hovnaian up $2.35 and Lennar up $1.85.

Hormel Foods, meat and food products maker, reported 2Q profit of 40 cents vs.38 cents a year ago on sales rise of 15% to $1.31 billion. The company forecasted annual profit of $1.70 to $1.80.

Heinz, ketchup and condiment maker, reported 4Q profit of 58 cents vs. 55 cents a year ago on sales growth of 5% to $2.45 billion and volume growth of 1.5% and weak dollar currency translation contributed 3% rise to sales.

Costco, wholesale warehouse club operator, reported 3Q profit of 43 cents vs. 42 cents a year ago on 10% rise in sales and 7% rise in sales for the same-store for the quarter. The gasoline sales at Costco are under scrutiny by investors as Costco replaces its inventory on daily basis which hurts company’s sales in rising price environment.

Fred’s, discount merchandiser, reported 1Q profit of 17 cents vs. 18 cents a year ago on 13% rise in revenue. Same-store sales increased 3% from 2.7% from a year ago. Operating income as a percentage of sales declined to 2.7% from 3.2%.

Toll Brothers, luxury home builder, reported 2Q earnings of $2.01 vs. 89 cents a year ago on 52% revenue jump to $1.25 billion. The company raised fiscal 2005 income guidance growth from 60% to 70% from a year ago. The company ended the quarter with the highest backlog of orders for 8,561 worth $5.87 billion.