International News Spurs U.S. Equity Rebound (TIF, HNZ, BIG, NTAP, WBD)
Stocks soared after the Chinese government denied a report that it was meeting with foreign bankers to discuss selling out of the euro denominated debt it holds. Meanwhile, Spain’s governing party narrowly won a vote to pass a 15 billion euro ($18.4 billion) austerity package that includes pay cuts and pension freezes for public employees and a new tax on the wealthy. Spain, which is the 4th largest EU economy, is at the heart of the worries in Europe, given its much bigger size than Greece. While today’s news was positive, the problem is far from solved, and news from Europe could still shake the U.S. markets. However, we continue to like the long-term prospects of stocks, and will be buyers on days of weakness.
Stocks zoomed on the day, with the Dow climbing 285 points to 10,259. The S&P jumped 35 points to 1,103, while the Nasdaq soared 82 points to 2,278. Oil gushed up $3.04 to $74.55 a barrel, while gold slipped -$1.50 to $1,211.90 an ounce.
On the economic front, the Labor Department announced that jobless claims fell by -14,000 last week to 460,000. Economists were looking for a drop to 455,000. Elsewhere, the Commerce Department released a report that said the economy grew at a 3.0% annual rate during Q1, slightly slower than the 3.2% initial estimate.
In earnings news, shares of Tiffany & Co. (TIF) climbed 7.5% on news the company’s Q1 profit more than doubled. The jeweler also issued a better-than-expected full-year outlook. For the period ended April 30th, Tiffany posted a profit of $64.4 million, or 50 cents a share, easily topping estimates of 36 cents. Last year, the company earned $24.3 million, or 20 cents a share. Revenue jumped 22% to $633.6 million, while U.S. same-store sales rose 15%. Looking forward, Tiffany guided for EPS of $2.55-$2.60 for the full year, up from its prior view of $2.45-$2.50 and higher than the $2.50 consensus. It also forecast revenue of $3.01 billion, matching expectations.
HJ Heinz (HNZ) said that its FY11 earnings could beat estimates, but that they would be affected by foreign currency fluctuations. Shares of the stock moved up 1.2%. For Q4, net income was $192.4 million, or 60 cents per share, up from $175.1 million, or 55 cents per share, a year earlier. Analysts were expecting EPS of 59 cents. Sales grew 8.3% to $2.72 billion. For FY11, Heinz predicted EPS of $3.06-$3.16, bracketing the $3.08 consensus. A total of 38 pro investors counted the stock among their top 15 holdings at the start of Q2, while 262 tickerspy members included the stock in their portfolios.
Shares of Big Lots (BIG) inched up 0.5% after the closeout retailer’s Q1 EPS topped expectations by a penny. The company also raised its FY11 forecast. For the period ended May 1st, Big Lots earned $55.9 million, or 68 cents per share, compared with $36.3 million, or 44 cents per share, last year. Wall Street was looking for EPS of 67 cents. Sales climbed 8.1% to $1.22 billion, and comparable-store sales rose 6%. The retailer raised its FY11 EPS from $2.65-$2.75 to $2.75-$2.85, compared to estimates of $2.80. For Q2, Big Lots forecast EPS of 44-49 cents. The Street was looking for Q2 EPS of 44 cents. A total of 13 pro investors counted the stock among their top 15 holdings at the start of Q2, while 129 tickerspy members included the stock in their portfolios.
NetApp (NTAP) reported better-than-expected Q4 earnings and a strong Q1 outlook. For the quarter ended April 30th, the data storage company earned $145.1 million, or 40 cents a share, more than double its earnings of $68.4 million, or 21 cents a share, a year earlier. Adjusted EPS was 50 cents, which beat the 44-cent consensus. Revenue soared 33% to $1.17 billion. For Q1, the company said it expects EPS of 43-47 cents, above expectations of 37 cents. Revenue was forecasted to fall in the range of $1.1-$1.14 billion. Analysts were looking for Q1 revenue of $1.04 billion. The stock surged 17.7%.
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