Fall Rally Not Out of the Question (AVAV, MW, SWHC, GLW, CAGC, UFI)

Stocks gave up ground today on the eve of an address on jobs by President Obama to a joint session of Congress tonight. Federal Reserve Chairman Ben Bernanke was also on the speaking trail, telling the Economic Club of Minnesota that the central bank would do everything it could to spur growth and reduce unemployment, but he didn’t spell out any new policy initiatives that might be rolled out at the FOMC meeting later this month. The up and down action we’ve seen this week is indicative of the kind of market we expect in the near term, but if investors coalesce around the notion that the recovery is uneven but not headed into another recession, the market could rally later in the fall.

The Chinese Agriculture Stocks Index was the top performing tickerspy Index on the day, led by China Agritech (CAGC) with a 9% gain. The Textile Stocks Index was the day’s worst performing tickerspy Index, with Unifi (UFI) down -8%.

Stocks gave up some of yesterday’s gains today. The Dow Jones Industrial Average lost -119 points to close at 11,296. The S&P 500 was off -13 points to 1,186, while the Nasdaq index shed -20 points to end the day at 2,529. Crude oil was also lower, shedding -29 cents a barrel to close at $89.05. Gold was up $39.90 to finish at $1,857.50 per ounce.

In economic news, initial jobless claims rose to 414,000 last week from 412,000 the previous week. Economists were expecting a reading of 405,000 new claims.

In earnings news, shares of AeroVironment (AVAV) plunged -6.27% despite the company reporting a fiscal first-quarter profit of $326,000, or a penny a share, compared with a year-earlier loss of -$3.4 million, or -16 cents a share. Revenue climbed 62% to $62 million. Analysts were expecting a profit of a penny a share on sales of $61.3 million. AeroVironment reiterated its full-year profit guidance of $1.28-$1.35 a share on revenue of $321-$336 million.

Shares of apparel retailer Men’s Wearhouse (MW) tumbled -9.45% after the company reported a fiscal second-quarter profit of $57.1 million, or $1.09 per share, compared with $43 million, or 81 cents per share, a year earlier. Revenue rose 22% to $655.5 million. On an adjusted basis, Men’s Wearhouse earned $1.11 compared with 84 cents a year earlier. Analysts were expecting a profit of $1.04 a share on sales of $643.6 million. For the third quarter, Men’s Wearhouse forecast adjusted earnings of 64-66 cents a share on sales growth of 3-4%, implying sales of $558-$564 million. Analysts were expecting 64 cents on revenue of $569 million. For the full year, the company expects to earn $2.13-$2.20 a share on sales growth of 12.5-13.5%, implying revenue of $2.37-$2.39 billion. Analysts were expecting $2.14 a share on sales of $2.35 billion. Six pros counted Men’s Wearhouse among their top holdings at the end of Q2 and 50 tickerspy members own the stock in their portfolios.

Shares of gun maker Smith & Wesson (SWHC) slid -7.84% after the company issued fiscal second-quarter guidance that missed analyst estimates. The company said its fiscal first-quarter profit fell to $791,000, or 1 cent per share, down from $6.2 million, or 10 cents per share, a year earlier. Revenue rose 4.5% to $99.2 million. Analysts were anticipating a profit of a penny a share. The company forecast fiscal second-quarter revenue of $93-$96 million and full-year sales of $410-$425 million. Analysts were looking for sales of $107.3 million for the second quarter and $427.2 million for the full year.

Specialty glass maker Corning (GLW) pared its third-quarter profit forecast by -35% on a sequential basis and lowered its LCD volume outlook to be flat on a sequential basis compared with previously forecast growth of mid- to high single-digits on a percentage basis. Shares of New York-based Corning fell -1.17%. Nearly 30 pros held Corning in their portfolios at the end of Q2 and nearly 1,130 tickerspy members own the stock in their portfolios.

Tags: AVAV, CAGC, GLW, MW, SWHC, UFI