Commodities in Freefall (CVS, WFMI, TBL, CI, PPO, ORA)
Commodities got absolutely hammered today, led lower by oil and silver, helping take much of the market down with it. Comments from European Central Bank President Jean-Claude Trichet that the EU would not raise interest rates next month helped send the dollar higher against the euro, spurring the commodity sell-off. Meanwhile, the jobs data in the U.S. has continued its recent weak trend. While falling commodities prices hit the markets today, we still view prices coming down as a positive for both the economy and the non-commodity related stocks.
The Energy Storage and Battery Technology Stocks Index was the top performing tickerspy Index on the day, led by Polypore International (PPO) with a 19% gain. The Geothermal Stocks Index was the day’s worst performing tickerspy Index, with Ormat Technologies (ORA) down -8%.
Stocks tumbled on the day, with the Dow dropping -139 points to 12,584. The S&P fell -12 points to 1,335, while the Nasdaq declined -14 points to 2,815. Oil nosedived -$9.44 to $99.80 a barrel, while gold slipped -$33.90 to $1,481.40 an ounce.
In economic news, initial jobless claims jumped by 43,000 last week to a seasonally adjusted 474,000, the highest level since August 2010. Economists were expecting initial claims for the week to drop to 410,000. The four-week moving average surged by 22,250 claims to 431,250, the highest mark since November.
In earnings news, pharmacy benefits provider and drug store operator CVS Caremark (CVS) said its first-quarter profit slid -8% to $713 million, or 52 cents per share, from $771 million, or 55 cents per share, a year earlier. Sales rose 9% to $25.88 billion. Excluding one-time items, the company earned 57 cents a share. Analysts were expecting a profit of 55 cents on revenue of $25.76 billion. Same-store sales increased 2.6%. Rhode Island-based CVS reiterated full-year profit guidance of $2.72-$2.82 a share and forecast revenue growth of 10%-12%. Analysts were expecting a profit of $2.77 a share. Shares of CVS rose 1.9%. Over 100 pros held CVS Caremark in their portfolios at the end of 2010 and nearly 600 tickerspy members own the stock in their portfolios.
Whole Foods Foods (WFMI), the operator of high-end grocery stores, said its fiscal second-quarter profit surged 33% to $89.9 million, or 51 cents per share, from $67.5 million, or 39 cents per share, a year earlier as sales climbed 12% to $2.35 billion. Analysts were expecting a profit of 47 cents on revenue of $2.37 billion. The company forecast full-year earnings of $1.87-$1.90 a share, 10 cents above previous guidance. The stock’s ticker will change to “WFM” tomorrow. Shares of Whole Foods rose 0.4%. Seventeen pros held Whole Foods in their portfolios as the end of last year and almost 400 tickerspy members own the stock in their portfolios.
Shares of Timberland (TBL) plunged -26.3% after the company said its first-quarter profit fell to $18.0 million, or 35 cents a share, down from $25.7 million, or 47 cents a share, a year earlier. Revenue rose 10% to $349 million. Analysts were expecting a profit of 59 cents on sales of $361 million. Timberland’s gross margins slumped to 46.8%, below the 47.53% analysts were expecting.
Health insurance provider Cigna (CI) said its first-quarter profit soared 47% to $429 million, or $1.57 per share, from $283 million, or $1.02 per share, a year earlier. Revenue increased 4% to $5.41 billion. Excluding one-time items, Cigna earned $1.37 a share. Analysts were expecting a profit of $1.09 on revenue of $5.49 billion. The company expects a full-year adjusted profit of $4.65-$5.00 a share, up from previous guidance of $4.30-$4.70 a share. Analysts were expecting a profit of $4.73. Shares of Cigna rose 2.7%.
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