Retail stocks rally

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

Retail sales for May jumped 6.4% compared to a year ago and were lower by 0.5% compared to April but the decline was lower-than-expected. GM stock rallied on the market expectations that health-care cost contaiment talks with labor union may be resolved sooner than anticipated.

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $343.6 billion, a decrease of 0.5 percent from the previous month, but up 6.4 percent from May 2004.

Total sales for the March through May 2005 period were up 7.1 percent from the same period a year ago. The March to April 2005 percent change was revised from +1.4 percent to +1.5 percent.

Retail trade sales were down 0.5 percent from April, but were up 6.3 percent above last year. Gasoline station sales were up 13.4 percent from May 2004 and sales of non-store retailers were up 11.9 percent from last year.

Retail stocks are trading higher on the back of this news. Shares of Best Buy, Circuit City, J C Penney, Wal-Mart, Target, Home Depot and other are trading higher.

General Motors is trading higher by 4% on the reported news that Union has been asked to agree on a meeting to cut health care costs for the retired employees.

Wyndham International, international hotel operator, agreed to be acquired by Blackstone Group for $3.2 billion in cash or at $1.15 per share. The stock jumped 20% in the morning trading hours to $1.15.

Investment Brokerage house Lehman Brothers reported 2Q earnings of $2.26 vs. $2.01 a year ago on 12% rise in revenue. The Investment banking revenue for the quarter jumped 6% reflecting second highest quarterly debt-underwriting revenue for the company. Capital markets revenue jumped 12% for the quarter. The stock is up 93 cents or 1%.

Best Buy reported 1Q profit of 51 cents vs. 28 cents a year ago on total sales increase of 12% and same-store sales growth of 4.5%. The company also raised its fiscal 2006 earnings guidance by 15 cents per share. The stock is up $7.20 or 12%.

In the metals market gold, copper, platinum and palladium is trading lower but silver is trading 10 cents higher. Volatility in the crude oil trading continues and at morning trading hours oil is up only 3 cents to $55.65 after trading close to $56 per barrel.