Is The Recovery Derailed or Just A Bump In The Road? (DKS, TJX, MNRO, LONG, LDK, HPQ)

Some lackluster earnings results and economic data pushed the market down early, but stocks rebounded from their intraday lows, and the Nasdaq managed to squeeze out a small gain for the market averages to end mixed. Energy and metal commodities also rebounded from their intraday lows. There are some concerns the economy is starting to slow a bit, but we don’t think the recovery is being derailed, instead there might just be a small bump in the road related to Japan and the violence in the Middle East. As such, we’re still expecting a relatively weak summer for stocks followed by a solid close to the year.

The Chinese Travel Stocks Index was the top performing tickerspy Index on the day, led by eLong (LONG) with a 57% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with LDK Solar Company (LDK) down -7%.

Stocks finished the day mixed with the Nasdaq the lone winner up 1 point to 2,783. The Dow fell -69 points to 12,479, while the S&P was down fractionally to 1,329. Oil slipped -46 cents to $96.91 a barrel, while gold dropped -$10.60 to $1,480.00 an ounce.

In economic news, the Commerce Department said housing starts plunged -10.6% in April to a seasonally adjusted rate of 523,000 units. March starts were revised up to 585,000 from 549,000. Economists were expecting an April reading of 568,000.

In earnings news, shares of technology firm Hewlett-Packard (HPQ) tumbled -7.3% after the company lowered its fiscal second-quarter and full-year profit and revenue guidance. For the second quarter, H-P expects a profit of $1.08 a share on revenue of $31.1-$31.3 billion. Analysts were expecting a profit of $1.23 on revenue of $31.84 billion. For the full year, California-base H-P is forecasting a profit of $5.00 a share, well below previous guidance of $5.20-$5.28 and below the consensus estimate of $5.24. The company is forecasting revenue of $1.29-$1.30 billion, below previous guidance of $130.0-$131.5 billion and below analyst estimates of $130.47 billion.

In the first quarter, H-P earned $2.03 billion, or $1.05 a share, compared with $2.2 billion, or 91 cents per share, a year earlier as revenue rose 3% to $31.63 billion. Excluding one-time items, the company earned $1.24. Analysts were expecting a profit of $1.21 on revenue of $31.55 billion. Nearly 150 pros held HP in their portfolios at the end of Q1 and nearly 1,300 tickerspy members own the stock in their portfolios.

Shares of Dick’s Sporting Goods (DKS) slid -3.1% after the sporting goods and apparel retailer missed top-line estimates and its Q2 guidance was below analyst estimates. For the first quarter, its profit jumped to $37.5 million, or 30 cents a share, from $26.2 million, or 22 cents per share, a year earlier. Revenue rose 6% to $1.1 billion, while same-store sales rose 2.1%. Analysts were expecting a profit of 29 cents on sales of $1.14 billion. For Q2, Dick’s forecast EPS of 47-49 cents versus the 50-cent consensus.

Discount retailer TJX Cos. (TJX), the operator of the TJMaxx and Marshalls chains, said its fiscal first-quarter profit fell -20% to $266 million, or 67 cents per share, from $331.4 million, or 80 cents per share, a year earlier. Revenue rose 4% to $5.22 billion. On an adjusted basis, the company earned 78 cents compared with 80 cents a year earlier. Analysts were expecting a profit of 80 cents on revenue of $5.14 billion. TJX raised its fiscal second-quarter guidance to 81-86 cents a share and its full-year guidance to $3.81-$3.83 a share. Analysts were expecting 85 cents for the second quarter and $3.89 for the full year. Shares of TJX fell -4.1%. Nearly 40 pros held TJX in their portfolios at the end of Q1 and more than 200 tickerspy members own the stock in their portfolios.

Shares of car and tire service provider Monro Muffler Brake (MNRO) surged 8.8% after the New York-based company said its fiscal fourth-quarter profit jumped 41% to $8.2 million, or 26 cents per share, from $5.9 million, or 19 cents per share, a year earlier. Revenue rose 2% to $150.8 million. Analysts were expecting a profit of 24 cents on revenue of $155.1 million. The company forecast a fiscal first-quarter profit of 44-47 cents a share on same-store sales growth of 1-3%. For fiscal 2012, Monro expects to earn $1.61-$1.75 a share on same-store sales growth of 4-6%. Analysts expect a profit of $1.60 on revenue of $694.3 million.

Tags: DKS, HPQ, LDK, LONG, MNRO, TJX