Big Europe News Trumping U.S. Data (PLL, NFLX, NUE, HCA, BAC, NEP)
Stocks had another strong day, as equities continued their recent rally. There was a lot of economic data out today, although that was largely ignored as stocks continue to take their cue from Europe. At home, the data was moderately disappointing, with jobless claims up more than expected and the Philly and Empire Manufacturing Indexes both declining more than projected; although industrial production came in higher than estimates and core inflation remained tame. The big news, though, was that the ECB (European Central Bank), Fed, and three other central banks announced that they would provide a number of European banks with dollars in three loan installments. The fear has been that European banks holding a lot of Greek and Italian debt would have trouble raising dollars in the short-term credit market. While a positive in that it helps prevent a potential liquidity issue, the move certainly doesn’t fix the underlying problems in Europe, and whatever news Europe brings tomorrow will likely set the tone for the market.
The Chinese Oil and Gas Stocks Index was the top performing tickerspy Index on the day, led by China North East Holdings (NEP) with a 21% gain. The Dotcom Retailer Stocks Index was the day’s worst performing tickerspy Index, with Netflix (NFLX) down -19%.
Stocks soared on the day, with the Dow up 186 points to 11,433. The S&P climbed 20 points to 1.7%, while the Nasdaq jumped 35 points to 2,607. Oil rose 49 cents to $89.40 a barrel, while gold fell -$45.10 to $1,781.40 an ounce.
In economic news, initial jobless claims rose by 11,000 last week to 428,000, worse than the 410,000 economists were expecting. Elsewhere, the Labor Department said the Consumer Price Index rose 0.4% in August, double expectations. Excluding food and energy prices, core CPI rose 0.2%, in line with estimates. Meanwhile, the Federal Reserve said industrial production surprisingly rose 0.2% in August following a 0.9% jump in July. Economists were expecting a flat reading.
In earnings news, filtration maker Pall (PLL) said its fiscal fourth-quarter profit rose to $97.4 million, or 82 cents a share, from $55 million, or 46 cents a share, a year earlier. On an adjusted basis, Pall earned 76 cents a share. Revenue jumped 15% to $780.4 million. Analysts were expecting a profit of 88 cents on sales of $760.9 million. The company forecast a fiscal 2012 adjusted profit of $3.07-$3.32 a share. Analysts were expecting EPS of $3.26. Shares of Pall rose 1.7%.
Shares of Netflix plunged -18.9% after the company slashed its third-quarter subscriber forecast by -1 million. The company said it expects to have 24 million subscribers at the end of the quarter compared with a previous estimate of 25 million. The company also cut its forecast for streaming-only subscribers to 21.8 million from 22 million. Forty-one pros held Netflix in their portfolios at the end of Q2 and nearly 1,100 tickerspy members own the stock in their portfolios.
Shares of steelmaker Nucor (NUE) jumped 2.9% despite the North Carolina-based company forecasting third-quarter profit results that will miss Wall Street estimates. The company expects to earn 45-55 cents a share, but analysts were expecting 64 cents. The company cited lower steel prices and rising raw material costs as reasons for the profit miss. Thirteen pros counted Nucor among their top holdings at the end of Q2 and nearly 900 tickerspy members own the stock in their portfolios.
HCA Holdings (HCA), the largest hospital operator in the U.S., said it will buy back 80.8 million of its own shares from Bank of America (BAC) in a transaction valued at about $1.5 billion. The purchase will reduce its share count by more than -15%. Bank of America was one of the lead underwriters for HCA’s IPO last year. Shares of HCA surged 12.0%.
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