Brutal Day for the Market (PETM, BID, DPZ, SODA, ANV, CCME)
It was a brutal day for the market, as stocks got hammered on the day despite opening in positive territory. While Fed chief Ben Bernanke said higher oil prices wouldn’t have a big impact on the U.S. economy and said inflation risk was only “modest,” the market didn’t share the same sentiment. “My sense is that the increases we’ve seen so far — while tough for many people — do not yet pose a significant risk to the overall recovery,” Bernanke said before Congress, admitting, though, that “sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability.” We continue to remain cautious in the near term, having earlier said we expected a market pullback, but we would get more constructive if the sell-off reaches -5% (The S&P is down about -2.7% from its closing high this year).
The Gold and Silver Stocks Index was the top performing tickerspy Index on the day, led by Allied Nevada Gold Corp (ANV) with a 12% gain. The Chinese Advertising Stocks Index was the day’s worst performing tickerspy Index, with China MediaExpress Holdin (CCME) down -13%.
Stocks tumbled on the day, with the Dow off -168 points to 12,058. The S&P lost -21 points to 1,306, while the Nasdaq dropped -45 points to 2,737. Oil rose $2.66 to $99.63 a barrel, while gold jumped $21.30 to $1,431.20 an ounce.
In economic news, the Institute for Supply Management’s factory index jumped to 61.4 in February, reaching the highest level in almost seven years and easily topping economists’ forecasts. Readings above 50 are considered positive.
In earnings news, PetSmart (PETM) reported Q4 earnings of $90.3 million, or 77 cents per share, compared with $75 million, or 61 cents per share, a year earlier. Revenue climbed 8% to $1.52 billion. Analysts were expecting a profit of 74 cents on revenue of $1.51 billion. The Arizona-based company forecast a first-quarter profit of 52-56 cents a share and a full-year profit of $2.23-$2.35 a share. Analysts had been expecting a profit of 54 cents for the first quarter and $2.34 for the full year. The stock rose 0.7%. Sixteen pros held PetSmart in their portfolios at the end of 2010, and almost 110 tickerspy members own the stock in their portfolios.
Auction house operator Sotheby’s (BID) posted a fourth-quarter profit of $96.2 million, or $1.38 a share, compared with $73.6 million, or $1.09 a share, a year earlier as revenue surged 46% to $318 million. Analysts had been expecting a profit of $1.32 on sales of $298 million. Auction commission margin fell to 18.0% from 20.4%. Sotheby’s recently said it expects to generate sales of over $300 million from the April Hong Kong Spring series. The stock fell-5.5%.
Domino’s Pizza (DPZ) reported a Q4 profit of $24.2 million, or 39 cents per share, compared $23.6 million, or 41 cents per share, a year earlier. Excluding one-time items, Domino’s earned 40 cents, which was what analysts were forecasting. Revenue rose 4% to $480 million, coming in below the $485.6 million consensus. Same-store sales increased 6.3%. The stock dropped -2.8%. Seven pros held Domino’s Pizza in their portfolios at the end of 2010 and almost 100 tickerspy members own the stock in their portfolios.
Shares of SodaStream International (SODA) fell -10.3% despite the Israel-based company saying it expects 2011 profit growth of 40% on revenue growth of 25%. The company said its fourth-quarter profit fell to $4.6 million, or 28 cents a share, from $5.8 million, or 44 cents, a year earlier. On an adjusted basis, SodaStream earned 33 cents while analysts were expecting a profit of 12 cents. Revenue soared 59% to $66.3 million, however, expenses rose 90%.
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