Dow Breaks Losing Streak, But Stocks Finish Off Highs (HD, TJX, ANF, BHP, POT, CAGC)

Stocks staged a nice rally, buoyed by the Potash (POT) buyout offer, which spurred buying in the commodity and agricultural sectors. Meanwhile, the earnings results from retailers, while nothing to get overly excited about, were relatively good given the choppy economic environment. However, the markets did close well off their highs, and we wouldn’t be surprised to see an oscillating market in the near term as summer winds down.

The Chinese Agriculture Stocks Index was the top performing tickerspy Index on the day, led by China Agritech Inc (CAGC) with a 11% gain.

Stocks rose on the day, with the Dow climbing 104 points to 10,406. The S&P gained 12 points to 1,093, while the Nasdaq advanced 28 points to 2,209. Oil moved 53 cent higher to $75.77 a barrel, while gold added $2.10 to $1,226.60 an ounce.

On the economic front, the Labor Department announced that the producer price index (PPI) moved up 0.2% last month, while core PPI, which excludes food and energy costs, rose 0.3%. Economists were expecting a 0.1% rise in PPI and a 0.2% gain in core PPI. Elsewhere, the Federal Reserve said that U.S. manufacturing activity grew 1.0% in July, following a drop of -0.1% in June. Meanwhile, new home and apartment construction increased 1.7% last month, while single-family home construction slipped -4.2%, according to the Commerce Department. Building permit requests fell -3.1% to a seasonally adjusted annual rate of 565,000, the slowest pace since May 2009.

In earnings news, shares of The Home Depot (HD) rose 3.4% after the company reported a better-than-expected Q2 profit and boosted its full-year earnings forecast. The home improvement chain also lowered its outlook for full-year sales growth. For the quarter, Home Depot posted a profit of $1.2 billion, or 72 cents per share, beating estimates by a penny. Last year’s net income was $1.1 billion, or 66 cents per share. Sales moved up 1.8% to $19.41 billion, while global same-store sales grew 1.7%. Looking forward, Home Depot raised its full-year EPS by two cents to $1.90, above the consensus by one cent. The company also cut its full-year sales growth to 2.6% from its previous projection of 3.5%, implying revenue of $67.9 billion, which came in below expectations of $68.21 billion.

The parent company of T.J. Maxx, Marshalls, and HomeGoods, The TJX Companies (TJX), said its Q2 profit jumped 16% on better sales and more customer traffic. For the period ended July 31st, the company earned $305 million, or 74 cents a share, up from $261.6 million, or 61 cents a share, a year ago. Adjusted EPS was 73 cents, matching expectations. Revenue grew 6.8% to $5.07 billion, while same-store sales climbed 3.0%. TJX raised its full-year view to EPS of $3.27-$3.37 from previous guidance of $3.24-$3.33. Analysts were looking for FY11 EPS of $3.37. For Q3, the company expects EPS of 86-91 cents, bracketing the 89-cent consensus. The stock rose 1.0%. A total of 55 Pro investors counted the stock in their top-15 U.S.-listed equity holdings at the start of Q2, while nearly 175 tickerspy members held the stock in their portfolios.

Shares of Abercrombie & Fitch (ANF) sank -6.9% despite the apparel retailer reporting a quarterly profit that easily topped estimates, as investors worried over an inventory build-up. For Q2, the company earned $19.5 million, or 22 cents a share, compared with a loss of -$26.7 million, or -30 cents a share, a year earlier. Adjusted EPS came in at 24 cents, handily beating the 16-cent consensus. Revenue increased by 17% to $745.8 million as comparable-store sales rose 5.0%. Abercrombie announced that it will close down 60 domestic stores over the fiscal year and open 20, down from 25, international ones. A total of 6 Pro investors counted the stock in their top-15 U.S.-listed equity holdings at the start of Q2, while 124 tickerspy members held the stock in their portfolios.

Potash saw its shares soar 27.7% after the Canadian fertilizer giant turned down an unsolicited merger offer worth $38.6 billion from BHP Billiton (BHP). Under the terms of the deal, BHP would have paid $130 a share in cash, a 16% premium to Potash’s closing stock price on Monday. Potash called the proposal “grossly inadequate.” Shares of BHP fell -2.4%.

Tags: ANF, BHP, CAGC, HD, POT, TJX