Portugal… Greece… Spain? (HPQ, CPB, DSW, FRO, ATRN, FREE)
Stocks continued to struggle, with the major market averages ending a seesaw day in the red. A lower-than-expected Q3 GDP revision combined with more worries over rising yields on EU bonds were the issues du jour for investors to worry about today. Spain took its turn in the spotlight today, as the country’s borrowing costs soared to 14-year highs after a weak bond auction saw yields on its 3-month bonds jump to 5.1% from 2.3% in an October auction. That’s higher than the 3-month bond yields of both Greece (4.1%) and Portugal (4.9%), although both nations are getting EU and IMF assistance. Expect European headlines and bond yields to continue to be a focus of the market.
The Dotcom Stocks Index was the top performing tickerspy Index on the day, led by Atrinsic (ATRN) with a 10% gain. The Dry Bulk Shipping Stocks Index was the day’s worst performing tickerspy Index, with FreeSeas Inc. (FREE) down -9%.
Stocks fell on the day, with the Dow off -54 points to 11,484. The S&P dropped -5 points to 1,188, while the Nasdaq edged down -2 points to 2,521. Oil rose $1.09 to $98.01 a barrel, while gold jumped $23.80 to $1,702.40 an ounce.
In economic news, the Commerce Department revised its third-quarter GDP reading lower to an increase of 2.0% from an initial increase of 2.5%. Economists had expected the revision to show growth of 2.3%. The FOMC minutes released today, meanwhile, showed that the Fed discussed providing more clarity on interest rate policy and future central bank moves.
In earnings news, Dow component Hewlett-Packard (HPQ) said it expects to earn at least $4.00 a share in fiscal 2012, well below the $4.67 a share analysts were expecting. In its fiscal fourth quarter, H-P earned an adjusted profit of $1.17 a share on revenue of $32.3 billion. Analysts had expected EPS of $1.13 on revenue of $32.05 billion. Shares of HP fell -0.8%. Nearly 70 pros held Hewlett-Packard in their portfolios at the end of Q3 and more than 1,300 tickerspy members own the stock in their portfolios.
Shares of Campbell Soup (CPB) dipped -5.3% after the company said its fiscal first-quarter profit fell -5% to $265 million, or 82 cents per share, from $279 million, or 82 cents per share, a year earlier. Revenue fell to $2.16 billion from $2.17 billion. Analysts had expected a profit of 79 cents on sales of $2.21 billion. The company expects a fiscal 2012 profit of $2.35-$2.42 a share on flat revenue or revenue growth of up to 2%. Analysts were expecting EPS of $2.38 on revenue of $7.83 billion. Seven pros counted Campbell Soup among their top holdings at the end of Q3 and nearly 180 tickerspy members own the stock in their portfolios.
Shoe retailer DSW Inc. (DSW) reported a fiscal third-quarter profit of $33.7 million, or 75 cents per share, compared with a loss of -$3.3 million, or -16 cents per share, a year earlier. Sales increased to $530.7 million from $489.3 million and same-store sales climbed 5.2%. On an adjusted basis, DSW earned $39.8 million, or 88 cents per share. Analysts had expected a profit of 80 cents per share on revenue of $531.7 million. The company raised its full-year guidance to $2.90-$2.95 a share from $2.70-$2.85 on same-store sales growth of 7-8%. Analysts were expecting a profit of $2.87 and sales of $2.02 billion. Shares of DSW rose 0.8%.
Shares of oil tanker operator Frontline (FRO) plunged -41.0% after the company said it may run out of cash next year. Frontline’s $225 million of 4.5% convertible bonds maturing in 2015 fell -86 cent to 37.53 cents on the dollar, Bloomberg reported, citing Goldman Sachs. The company also reported a third-quarter loss of -$166.6 million, compared with a year-ago profit of $12.72 million.
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