All Eyes On Unemployment Ahead of Holiday (TD, PSS, SAI, BKC, PIR)

Stocks followed up yesterday’s rally with a solid day of gains. The economic news was generally good, with pending home sales and jobless claims coming in better than expected. All eyes that haven’t already hit the beach tomorrow will be on the unemployment report, which is likely to dictate tomorrow’s action on what otherwise should be a slow day.

The Home Furnishing Retailer Stocks Index was the top performing tickerspy Index on the day, led by Pier 1 Imports (PIR) with a 17% gain.

Stocks climbed on the day, with the Dow up 51 points to 10,320. The S&P advanced 10 points to 1,090, while the Nasdaq jumped 23 points to 2,200. Oil ended the day up $1.04 to $74.95 a barrel, while gold rose $5.20 to $1,251.50 an ounce.

On the economic front, the Labor Department announced that there were 472,000 jobless claims filed last week, down -6,000 from an upwardly revised 478,000 the previous week. Economists were looking for 475,000 new claims. Meanwhile, the Commerce Department reported that U.S. factory orders inched up 0.1% in July. Excluding the volatile transportation sector, however, orders fell -1.5%. Elsewhere, the National Association of Realtors said that pending home sales rose 5.2% in July, surprising analysts who were expecting a -1% drop.

In earnings news, shares of Toronto-Dominion Bank (TD) edged up 1.2% after the company’s Q3 profit jumped 29% due to fewer loan defaults and strong retail bank performance. For the period ended July 31st, Canada’s second-largest bank earned C$1.18 billion (US$1.12 billion), or C$1.29 per share (US$1.23), up from C$912 million, or C$1.01 per share, a year ago. Adjusted EPS was C$1.43, which missed estimates by a penny. Total revenue increased 2% to C$4.74 billion. Profit at TD Bank’s U.S. franchise soared 30%, while income at its flagship Canadian retail bank climbed 24%. Meanwhile, the company’s Tier 1 capital ratio, which measures financial stability, rose to 12.5% from 11.1%.

Collective Brands (PSS) saw its shares tumble -9.1% after the footwear retailer said its Q2 results missed expectations. For the quarter, net income was $21.1 million, or 32 cents a share, compared with $18.7 million, or 29 cents a share, last year. Sales rose slightly to $841.3 million. Analysts were expecting EPS of 45 cents on revenue of $862.8 million. A total of 5 Pro investors counted Collective Brands in their top-15 U.S.-listed equity holdings at the start of Q3, while 30 tickerspy members held the stock in their portfolios.

Shares of engineering services company, SAIC (SAI) slipped -1.2% despite posting a 54% rise in its Q2 profit and blowing by EPS estimates. For the period ended July 31st, SAIC earned $189 million, or 50 cents a share, up from $123 million, or 31 cents a share, a year earlier. Adjusted EPS came in at 42 cents, which easily topped the 33-cent consensus. Revenue rose 2% to $2.79 billion, while SG&A expenses fell -16% to $133 million. For the full year, SAIC expects EPS to rise 14-18%, which is above analyst projections of 10%, and revenue to grow 3-6%, in line with the 5% consensus. A total of 2 Pro investors counted the stock in their top-15 U.S.-listed equity holdings at the start of Q3, while 67 tickerspy members held the stock in their portfolios.

In M&A news, Burger King (BKC) has agreed to be purchased by investment firm 3G Capital for about $3.26 billion, or $4.0 billion including the debt 3G will assume. Burger King shareholders will receive $24 per share, which represents about a 46% premium over the stock’s price yesterday before rumors about the deal started to circulate. The deal is expected to close in Q4 2010. The stock spiked 25.1% on the news.

Tags: BKC, PIR, PSS, SAI, TD