Europe Fixation Leads to Seesaw, Spin-Around Action (WYNN, UNP, LH, BWLD, JASO, NVEC)
It was a seesaw, up and down, spin yourself around day on Wall Street, as the market reacted to any and all news coming out of Europe. In the end, stocks ended mixed. Back home, the earnings news was once again generally strong, while the economic data was decent. If the fixation on Europe’s woes can be removed and the focus turns to the U.S. and company fundamentals, we think the market sees a nice rally into year-end. However, there is no easy fix to cure Europe’s sovereign debt woes and inevitably some more pain will be felt across the Atlantic.
The Chinese Solar Stocks Index was the top performing tickerspy Index on the day, led by JA Solar Holdings (JASO) with a 24% gain. The Memory Chip Stocks Index was the day’s worst performing tickerspy Index, with NVE (NVEC) down -14%.
Stocks ended the day mixed, with the Nasdaq the lone loser down -5 points to 2,599. The S&P added 6 points to close at 1,125, while the Dow rose 37 points to 11,542. Oil fell -81 cents to $85.30 a barrel, while gold fell -$34.10 to $1,612.90.
In economic news, weekly jobless claims fell by -6,000 to 403,000 last week from an upwardly revised 409,000 the previous week. Economists expected a reading of 400,000 for last week. Elsewhere, the National Association of Realtors (NAR) said sales of existing homes fell -3% to a seasonally adjusted annual rate of 4.91 million in September, down from an upwardly revised August reading of 5.06 million. The Philadelphia Fed Manufacturing Survey, meanwhile, jumped 8.7 points in October after dropping to -17.5 in September. Economists expected a reading of -9.0. Finally, the Conference Board said its index of U.S. leading economic indicators increased 0.2% in September following 0.3% gain in August. Economists expected a 0.2% increase in September.
In earnings news, shares of casino operator Wynn Resorts (WYNN) fell -5.3% after the company’s results missed on the bottom line. Wynn reported a third-quarter profit of $127.1 million, or $1.01 a share, compared with a year-earlier loss of -$33.5 million, or -27 cents a share. On an adjusted basis, Wynn earned $1.05 a share. Revenue rose to $1.3 billion from $1.0 billion. Analysts had expected a profit of $1.18 a share on revenue of $1.29 billion.
Shares of Union Pacific (UNP), the largest U.S. railroad operator, jumped 4.0% after the company said its third-quarter profit rose 16% to $904 million, or $1.85 per share, from $778 million, or $1.56 per share, a year earlier. Revenue soared 16% to $5.1 billion. Analysts had been looking for a profit of $1.81 per share on revenue of $5.03 billion. Eighty-three pros held Union Pacific in their portfolios at the end of Q2 and nearly 500 tickerspy members own the stock in their portfolios.
Laboratory Corp of America (LH) said its third-quarter profit slid to $134.3 million, or $1.31 a share, compared with $140 million, or $1.34 per share, a year earlier. Revenue rose 10% to $1.4 billion. On an adjusted basis, the company earned $1.61 a share. Analysts had expected a profit of $1.60 on revenue of $1.41 billion. LabCorp now expects a full-year profit of $6.28-$6.33 up from a previous forecast of $6.17-$6.32 a share. Shares of LabCorp fell -0.9%.
Shares of Buffalo Wild Wings (BWLD) surged 7.1% after the operator of casual dining restaurants said its third-quarter profit soared 33% to $11.3 million, or 61 cents per share, from $8.5 million, or 47 cents per share, a year earlier. Revenue climbed 31% to $197.8 million, while same-store sales jumped 5.7%. Analysts had expected a profit of 59 cents on revenue $190.6 million. Buffalo Wild Wings forecast 2011 profit growth of at least 23% and 2012 growth of 20%. Five pros counted Buffalo Wild Wings among their top holdings at the end of Q2 and nearly 300 tickerspy members own the stock in their portfolios.
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