Stocks Whipsaw To Finish Flat (FSLR, EXPE, MRK, RGC, ECPG)

After mixed economic data whipsawed stocks back and forth throughout the day, the major market indices eventually ended near breakeven. We continue to believe the economic data will be choppy, so the conflicting news isn’t all that surprising. As such, we think it’s best to focus on value and individual stories.

The Bill Collector Stocks Index was the top performing tickerspy Index on the day, led by Encore Capital Group (ECPG) with a 6% gain.

Stocks ended the day mixed, with the Dow the sole loser down -1 point to 10,466. The S&P was up fractionally, while the Nasdaq rose 3 points to 2,255. Oil edged up 59 cents to $78.95 a barrel, while gold rose $12.40 to $1,180.80 an ounce.

On the economic front, the Q2 U.S. gross domestic product grew at an annual pace of 2.4%, the Commerce Department reported. The number came in slightly below the 2.5% growth economists were expecting. The announced figure was especially discouraging to investors since the government revised Q1 growth to a pace of 3.7% from 2.7%, in the same report. In a separate report, consumer sentiment tumbled in July to its lowest level in nine months, according to Thomson Reuters/University of Michigan’s Surveys of Consumers. The survey’s July reading on the overall index on consumer sentiment fell to 67.8 from 76.0 in June, while the survey’s barometer of current economic conditions fell to 76.5, the lowest since November 2009. Analysts had expected an end-July figure of 76.0. Meanwhile, a different report showed that the Chicago PMI came in well above estimates at 62.3 versus the 56.3 expected. The Chicago PMI measures the purchasing of managers in Illinois, Indiana, and Michigan. Any reading above 50 indicates expansion.

In earnings news, shares of First Solar (FSLR) dipped -7.4% after the solar firm reported weaker profits in its Q2 earnings report. The solar panel maker said net income in the fourth quarter fell -12% to $159 million, or $1.84 per share, compared with net income of $180.6 million, or $2.11 per share, a year ago. Revenue jumped 12% to $587.9 million from $525.9 million. Both figures topped analyst expectations of profit of $1.61 per share on revenue of $543.1 million. Looking forward, First Solar said it expects 2010 sales of $2.5-$2.6 billion, and hiked its profit outlook to a range of $7.00-$7.40 per share. The projection was largely in-line with analyst forecasts for profit of $7.12 per share on revenue of $2.62 billion. A total of 15 Pro investors counted First Solar in their top-15 U.S.-listed equity holdings at the start of Q2, while 1444 tickerspy members held the stock in their portfolios.

Shares of Expedia (EXPE) jumped 7.6% after the online travel agency reported rising profits in its Q2 report. Citing rising travel bookings, Expedia’s net income jumped to $114.3 million, or 40 cents per share, up from net income of $40.9 million, or 14 cents per share, in the same quarter last year. Excluding one-time items, Expedia said it earned 44 cents per share. Revenue spiked 8% to $834 million. Analysts were expecting EPS of 42 cents on revenue of $845.5 million. A total of nine Pro investors counted Expedia in their top-15 U.S.-listed equity holdings at the start of Q2, while 88 tickerspy members held the stock in their portfolios.

Merck (MRK) reported a -52% plunge in Q2 net income, as several factors like restructuring charges from its recent acquisition of Schering-Plough and increased generic competition weighed on earnings. Shares of the world’s second-biggest drug company dipped -1.7%. For the three months ended June 30th, Merck said its net income was $752.4 million, or 24 cents per share. That’s noticeably lower from the $1.56 billion, or 74 cents a share, the firm earned a year earlier. However, excluding one-time items, income would have been $2.71 billion, or 86 cents a share. The number topped the 83-cent EPS analyst consensus. Looking ahead, Merck forecast full-year net income of between 82 cents to $1.16 per share, or $3.29-$3.39 per share excluding items. The outlook bracketed analyst expectations for earnings of $3.37 per share.

Elsewhere in the market, Regal Entertainment Group (RGC) saw its shares slip -2.8% after the firm reported earnings that missed Wall Street’s view. For the fiscal second quarter, the company earned $4.8 million, or 3 cents a share, compared with a profit of $40.5 million, or 26 cents per share, a year earlier. Total sales dropped -7% to $730.7 million from $789.2 million a year ago. The No. 1 U.S. movie theater operator said adjusted earnings, excluding the loss on reducing its debt load, came to 12 cents per share. The number was still short of analyst EPS estimates of 17 cents. A total of eight Pro investors counted Regal in their top-15 U.S.-listed equity holdings at the start of Q2, while 31 tickerspy members held the stock in their portfolios.

Tags: ECPG, EXPE, FSLR, MRK, RGC