Greece’s Classic Cousin in the Spotlight (ROK, FOSL, SMG, WMS, CONN, TRGT)
It was a seesaw day on Wall Street, and while today’s focus was once again on Europe, it was Greece’s classic cousin Italy in the spotlight. The yield on Italian bonds has continued to rise, getting close to unsustainable levels given the country’s high debt to GDP ratio, a low birth rate, and modest growth prospects, making the nation another potential EU domino to fall. Markets rallied, however, after longtime controversial Italian leader, Premier Silvio Berlusconi, said he would resign after reforms are passed. Italy has a number of problems and Berlusconi resigning doesn’t immediately fix them, but if yields on Italian bonds come down as a result, it would be a positive, as the country has to roll over a lot of debt in the coming years.
The Electronics Retailer Stocks Index was the top performing tickerspy Index on the day, led by Conn’s (CONN) with a 21% gain. The Nervous System Stocks Index was the day’s worst performing tickerspy Index, with Targacept (TRGT) down -60%.
Stocks rallied on the day, with the Dow up 102 points to 12,170 points. The S&P jumped 15 points to 1,276, while the Nasdaq advanced 32 points to 2,727. Oil added $1.28 to $96.80 a barrel, while gold rose $8.10 to $1,799.20 an ounce.
In earnings news, shares of industrial machinery maker Rockwell Automation (ROK) climbed 6.5% after the company said its fiscal fourth-quarter profit rose 54% to $201.8 million, or $1.39 per share, from $131.3 million, or 91 cents per share, a year earlier as revenue climbed 22% to $1.65 billion. Analysts had expected a profit of $1.21 per share on $1.55 billion in revenue. Rockwell forecast a fiscal 2012 profit of $5.05-$5.45 a share on revenue of $6.2-$6.5 billion. Analysts were expecting $5.15 a share on $6.36 billion in revenue. Nine pros counted Rockwell Automation among their top holdings at the end of Q3 and almost 110 tickerspy members own the stock in their portfolios.
Watchmaker Fossil (FOSL) said its third-quarter profit rose 2% to $69.6 million, or $1.09 per share, from $68.2 million, or $1.00 per share, a year earlier. Sales rose almost 23% to $642.9 million. Analysts had expected a profit of $1.03 a share on sales of $640.3 million. The company raised its full-year guidance to $4.50-$4.53 a share from $4.40-$4.50 a share. Shares of Fossil fell -2.5%. Seventeen pros held Fossil in their portfolios at end of Q3 and more than 160 tickerspy members own the stock in their portfolios.
Shares of garden products maker Scotts Miracle-Gro (SMG) slid -6.0% after the company reported a third-quarter loss that was wider than analyst expectations. For the third quarter, Scotts Miracle-Gro had a loss of -$28.8 million, or -46 cents a share, from continuing operations. Analysts expected a loss of -44 cents a share. Sales slid -1% to $417.2 million.
Shares of slot machine maker WMS Industries (WMS) plunged -16.8% after the company pared its 2012 revenue forecast. The company said it expects 2012 revenue to be slightly below its previous forecast that called for revenue growth of 3-5%. The company posted an adjusted third-quarter profit of 24 cents a share on revenue of $155.6 million, well below the profit of 29 cents on revenue of $170.7 million analysts were expecting. Revenue dropped -17% to $155.6 million, missing the $170.7 million consensus.
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