Only Bank Stocks Feeling Shaky (HNZ, MDT, WSM, COCO, BAC, MS, GS, JKS, GFI)
A rare earthquake felt on Wall Street couldn’t keep stocks from having a strong day. With little in the way of market-moving news, the rally could have been a bit of short covering ahead of Fed Chief Ben Bernanke’s speech later this week. One area that continues to struggle, though, is the big banks, where names like Bank of America (BAC), Morgan Stanley (MS), and Goldman Sachs (GS) had trouble finding traction today, despite a reversal of sentiment on the financial sector this morning from prominent analyst Dick Bove, who, after advising investors to sell everything in sight a month ago, said today to buy with both hands. The valuation for many of these names is very attractive, but investor confidence is going to have to return to see them get a lift.
The Chinese Solar Stocks Index was the top performing tickerspy Index on the day, led by JinkoSolar Holding (JKS) with a 15% gain. The Gold and Silver Stocks Index was the day’s worst performing tickerspy Index, with Gold Fields (GFI) down -7%.
Stocks climbed on the day, led by a 101-point, or 4.3%, surge in the Nasdaq to 2,446. The Dow jumped 322 points to 11,177, while the S&P leapt 39 points higher to 1,162. Oil rose $1.02 to $85.44 a barrel, while gold fell -$30.60 to $1,861.30 an ounce.
In economic news, the Commerce Department said new home sales fell -0.7% in July to a seasonally adjusted 298,000 units. That’s the third-straight month of declines and well below the 700,000 units that mark a healthy rate of sales.
In earnings news, H.J. Heinz (HNZ), the world’s biggest ketchup maker, reported a -6% decline in profits to $226.1 million, or 70 cents a share, from $240.4 million, or 75 cents a share, a year earlier. Adjusted EPS was 78 cents, 2 cents above the consensus. Sales jumped 15% to $2.85 billion, above the $2.79 billion analysts were expecting. The Pennsylvania-based company forecast an adjusted profit of $3.32 a share, below the consensus estimate of $3.35 a share. Shares of Heinz fell -1.2%. Thirty-one pros held Heinz in their portfolios at the end of Q1 and nearly 400 tickerspy members own the stock in their portfolios.
Shares of Medtronic (MDT), the world’s largest medical device maker, jumped 6.2% despite reporting a -1% decline in its fiscal first-quarter profit. For the quarter, Medtronic said its profit fell to $821 million, or 77 cents per share, from $830 million, or 76 cents per share, a year earlier. On an adjusted basis, the company earned 79 cents a share on revenue of $4.05 billion. Analysts were expecting a profit of 79 cents on revenue of $3.98 billion. Medtronic expects a fiscal 2012 profit of $3.43-$3.50 a share on revenue of $16.1-$16.41 billion. Analysts were forecasting a profit of $3.46 on sales of $16.57 billion. Nearly 60 pros held Medtronic in their portfolios at the end of Q1 and more than 500 tickerspy members own the stock in their portfolios.
Williams-Sonoma (WSM), the maker of high-end home goods, said its second-quarter profit soared 28% to $39.3 million, or 37 cents a share, as revenue rose 5% to $814.8 million. Same-store sales grew 6.5%. Analysts were expecting a profit of 36 cents on sales of $824.0 million. California-based Williams-Sonoma forecast full-year revenue growth of 5-6% up from previous guidance of 4-6%. The company raised its profit guidance to $2.17-$2.22 a share from $2.13-$2.21. Shares of Williams-Sonoma fell -2.0%.
Shares of Corinthian Colleges (COCO) plunged -7.1% after the for-profit education provider said its fiscal fourth-quarter fell -90% to $3.4 million, or 5 cents per share, from $33.9 million, or 38 cents per share, a year earlier. Revenue declined -12% to $425.2 million. On an adjusted basis, Corinthian earned 13 cents a share. Analysts were expecting a profit of 12 cents on revenue of $432.2 million. For the current quarter, Corinthian expects a loss of -2 to -4 cents a share on revenue of $414-$424 million. Analysts were expecting an adjusted profit of 14 cents on revenue of $427.9 million. The company forecast a full-year profit of 30-35 cents.
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