Confidence Surge Balances Bankruptcy, Jewelry Warning (TIF, HI, GLW, AMR, MAGS, ZX)
A surge in consumer confidence and strong Cyber Monday sales helped balance out the bankruptcy of the U.S.’s third-largest airline and a weak earnings forecast from high-end jeweler Tiffany (TIF). At the end of the day, the market ended mixed as a result. All eyes, meanwhile, continue to focus on Europe, as Italy sold 7.5 billion euros worth of three- and 10-year bonds, near the top of its target range. We still think we can see a nice Santa Claus rally heading into year-end, although some beaten-down stocks are likely to continue to feel some year-end selling pressure.
The Security and Protection Service Stocks Index was the top performing tickerspy Index on the day, led by Magal Security Systems (MAGS) with a 67% gain. The Chinese Auto Parts Stocks Index was the day’s worst performing tickerspy Index, with China Zenix Auto (ZX) down -4%.
Stocks finished the trading session mixed, with the Nasdaq off -12 points to 2,516. The Dow added 33 points to close at 11,556, while the S&P rose 3 points to 1,195. Oil jumped $1.58 to $99.79 a barrel, while gold advanced $2.60 to $1,713.40 an ounce.
In economic news, the Conference Board said its consumer confidence index rose to 56.0 from a revised 40.9 reading in October. That’s good for the biggest monthly increase in over eight years. Elsewhere, the Standard & Poor’s/Case-Shiller index indicated that home values declined in September in 17 of the 20 major metro areas surveyed. The index covers more than half of all U.S. homes.
In earnings news, shares of Tiffany plunged -8.7% after the company gave fourth-quarter guidance of $1.48-$1.58 a share, below the $1.63 analysts were expecting. The company did raise its full-year guidance to $3.70-$3.80 from $3.65-$3.75. Analysts were expecting $3.72. In its fiscal third quarter, Tiffany earned $89.7 million, or 70 cents per share, compared with $55.1 million, or 43 cents per share, a year earlier. Revenue climbed 21% to $821.8 million. Analysts had expected a profit of 60 cents on sales of $801.8 million.
Hillenbrand (HI), the maker of funeral service products, said its fiscal fourth-quarter profit rose to $23.5, million, or 38 cents per share, from $20.1 million, or 32 cents per share, a year earlier as revenue increased 9% to $231.2 million. Analysts had expected a profit of 36 cents. For fiscal 2012, the company forecast a profit of $1.82-$1.92 a share on revenue growth of 13-17%. That implies revenue of $998.2 million to $1.03 billion. Analysts were expecting a profit of $1.77 per share on revenue of $954.1 million. Shares of Hillenbrand fell -0.8%.
Shares of glassmaker Corning (GLW) tumbled -10.8% after the New York-based company lowered its current quarter production forecast for glass used for LCD displays. Corning will also be lowering its Gorilla Glass sales forecast for the fourth quarter to a -25% sequential decline, compared to its original forecast of a -15% sequential decline. The revision is due to lower worldwide demand for cover glass for tablet computers, the company said in a statement. Sixteen pros held Corning in their portfolios at the end of Q3 and nearly 1,200 tickerspy members own the stock in their portfolios.
Shares of AMR (AMR), the parent company of American Airlines, nosedived -84.0% after the company filed for voluntary Chapter 11 bankruptcy protection. The company also announced the retirement of CEO Gerard Arpey. The company said it hopes the bankruptcy filing will help it reduce labor costs. American is the third-largest U.S. carrier. Four pros counted AMR among their top holdings at the end of Q3 and nearly 400 tickerspy members own the stock in their portfolios.
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