Market Wants Stocks Up, But Not Too Fast (BBY, SHLD, STZ, GME, LEN)

Stocks ended mixed for the third-straight day this week. Tech once again was a laggard, and seems to be taking a rest to start the new year. Some pretty solid sales numbers from retailers, with a few notable exceptions, helped the sector and broader market. What the market ideally wants for 2010 is a slow but steady moderate recovery that shows the economy is gaining steam but not enough to tempt the Fed to raise interest rates too soon.

The Homebuilder Stocks Index was the top performing tickerspy Index on the day, led by Lennar Corp (LEN) with a 13% gain.

The major market averages end mixed, with the Nasdaq the lone loser down -1 point. The Dow climbed 33 points to 10,607, while the S&P added 5 points to 1,142. Oil fell -52 cents to $82.66 a barrel, while gold slipped -$2.90 to $1,133.60 an ounce.

In economic news, the Labor Department announced initial jobless claims rose by 1,000 to a seasonally adjusted 434,000. Economists were expecting a bigger increase to 447,000.

On the earnings front, Bed Bath & Beyond (BBY) shares jumped 6.9% after the homes good retailer’s fiscal Q3 results topped analyst estimates. For the period ended November 28th, the company posted a profit of $151.3 million, or 58 cents per share, up from $87.7 million, or 34 cents per share, a year ago. Revenue rose 11% to $1.98 billion, as same-store sales climbed 7.3%. The Wall Street consensus was for EPS of 43 cents on sales of $1.9 billion. For Q4, the company guided for EPS of between 67-71 cents, versus estimates of 62 cents. Thirteen Pro investors counted the stock among their top-15 holdings at the start of Q4, while 127 tickerspy members included the stock in their portfolios.

Elsewhere in retailer, shares of Sears Holdings (SHLD) soared 11.6% after the retailer said that it expects to post Q4 EPS well ahead of analyst estimates. The company now anticipates recording adjusted EPS of between $3.36-$4.06 a share, while the Wall Street consensus was only $2.65. Sears also said that its December same-store sales rose 0.4%, helped by a 5.3% increase at K-mart.

Wine and spirits maker Constellation Brands (STZ) reported a fiscal Q3 profit of $44.1 million, or 20 cents per share, down -47% from $83.5 million, or 38 cents per share, a year earlier. Adjusted EPS came in at 54 cents, 2 cents ahead of estimates. Sales net of excise taxes fell -4% to $987.7 million. Looking forward, the company reaffirmed its full-year outlook for adjusted EPS of $1.60-$1.70. The stock fell -1.0%.

Shares of GameStop (GME) plunged -14.8% after video game retailer lowered its Q4 EPS guidance from a range of $1.47-$1.65 to $1.25-$1.29. Analysts were looking for EPS of $1.57. The company said sales over the 9-week holiday season were $2.86 billion, while same-store sales fell -8.6%. Twenty Pro investors counted the stock among their top-15 holdings at the start of Q4, while 283 tickerspy members included the stock in their portfolios.

Tags: BBY, GME, LEN, SHLD, STZ