All Eyes On Economy Until Earnings Season (SMOD, CAT, WAG, CVS, NOA)

Stocks waffled back and forth throughout the day on this options expiration Friday. All eyes will continue to be on Europe and the economic data until investor attention turns to earnings season, which kicks off in mid-July.

The Oil Sands Stocks Index was the top performing tickerspy Index on the day, led by North American Energy Partners (NOA) with a 6% gain.

Stocks edged higher on the day, with the Dow up 16 points to 10,451. The S&P added 1 point to 1,118, while the Nasdaq rose 3 points to 2,310. Oil inched up 39 cents to $77.18 a barrel, while gold rose $9.70 to $1,257.20 an ounce.

On the economic front, the Labor Department reported that the unemployment rate dropped in 37 states and the District of Columbia, while six states had increases and seven saw no change. Nevada surpassed Michigan for the highest unemployment rate, as its rate jumped to 14%, while Michigan’s fell to 13.6%.

In earnings news, shares of SMART Modular Technologies (SMOD) rose 3.5% after the chipmaker’s Q3 results beat estimates. The company also gave a strong outlook for Q4. For the period ended May 28th, SMART earned $14.9 million, or 23 cents per share, versus a loss of -$2.4 million, or -4 cents per share, a year earlier. Adjusted EPS was 26 cents, which topped the 18-cent consensus. Revenue increased to $201.2 million from $91.6 million, above estimates of $180.7 million. Q4 EPS is expected to be 22-24 cents, the company said, on revenue of $200-$210 million. Analysts were looking for EPS of 20 cents on revenue of $185.9 million. A total of one pro investor counted the stock among its top 15 holdings at the start of Q2, while 51 tickerspy members included the stock in their portfolios.

For the first time since 2006, North American machine sales grew year over year for construction and mining equipment maker Caterpillar (CAT). The stock edged up 1.4%. May sales in North America were up 15%. In the Asia Pacific region sales soared 38%, but fell -8% in the Europe, Africa and the Middle East region. Latin America sales dipped -2%. A total of 58 pro investors counted the stock among their top 15 holdings at the start of Q2, while 1,633 tickerspy members included the stock in their portfolios.

Pharmacy operators Walgreen (WAG) and CVS Caremark (CVS) ended a dispute over pharmacy benefit management (PBM) reimbursement rates and signed a new PBM contract that will have Walgreen continue to participate in the CVS Caremark pharmacy benefit management national retail network. The companies did not provide any financial terms of the deal, but said it is a multi-year agreement. Shares of Walgreen moved up 2.8% on the news, while CVS shares rose 1.9%.

Tags: CAT, CVS, NOA, SMOD, WAG