Gains Locked in with More Headlines on the Way from Europe (ULTA, BIG, HRB, RIMM, WAVE, THC)
Stocks climbed early on a solid jobs report, but the gains slowly dissipated throughout the day and stocks ended up closing around breakeven. It appears traders were locking in some gains ahead of next week’s European Central Bank meeting and a European Union summit. While the U.S. continues to show signs of economic improvement, headlines out of Europe are still likely to drive the markets in the near term.
The Communication Services Stocks Index was the top performing tickerspy Index on the day, led by Nextwave Wireles (WAVE) with a 122% gain. The Hospital Stocks Index was the day’s worst performing tickerspy Index, with Tenet Healthcare (THC) down -11%.
Stocks closed mixed, with the Dow down -1 point to 12,019; the Nasdaq up 1 point to 1,244; and the S&P up fractionally to 1,244. Oil rose 76 cents to $100.96 a barrel, while gold climbed $11.50 to $1,751.30 an ounce.
In economic news, the Labor Department said the economy added 120,000 new jobs in November and the unemployment rate fell to 8.6%, the lowest level in two-and-a-half years.
In earnings news, shares of Ulta Salon, Cosmetics & Fragrance (ULTA) surged 8.3% after the company issued fourth-quarter guidance that topped Wall Street estimates. For the quarter, the company expects to earn 62-64 cents a share on sales of $552-$562 million. Analysts were expecting EPS of 61 cents on revenue of $558.7 million. For the third quarter, Ulta posted a profit of $26.8 million, or 42 cents a share, compared with $14.2 million, or 23 cents a share, a year earlier. Overall sales climbed 22% to $413.1 million and same-store sales rose 10%. Analysts had expected a profit of 38 cents on revenue of $406.5 million.
Shares of discount retailer Big Lots (BIG) plunged -8.7% after the company said its fiscal third-quarter slipped -76% to $4.2 million, or 6 cents per share, from $17.7 million, or 23 cents per share, a year earlier. Revenue increased to $1.14 billion from $1.06 billion last year. Analysts had expected a profit of 8 cents on sales of $1.12 billion. U.S. revenue at stores open at least two years rose 1.7%. Big Lots raised its profit from continuing operations guidance to $2.85-$2.92 a share from $2.80-$2.90 a share. Analysts were expecting $2.89. Twelve pros counted Big Lots among their top holdings at the end of Q3 and nearly 160 tickerspy members own the stock in their portfolios.
Shares of tax preparation firm H&R Block (HRB) tumbled -6.4% after the company reported a fiscal adjusted second-quarter loss of -38 cents when analysts were expecting a loss of -34 cents per share. On a GAAP basis, the company lost -$141.7 million, or -47 cents per share, versus a loss of -$109 million, or -36 cents per share, last year. Revenue rose 8% to $129.2 million. The company also announced that it had completed the sale of its RSM McGladrey consulting unit to McGladrey and Pullen LLP.
Shares of BlackBerry maker Research In Motion (RIMM) slid -9.7% after the company said it doesn’t expect to meet its full-year profit forecast of $5.25-$6.00 a share due to a $360 million after-tax writedown on PlayBook inventories and other issues. The company said it expects its fiscal third-quarter results to come in at the low end of the $1.20-$1.40 range. Revenue is expected to be below the $5.3-$5.6 billion range. Sixteen pros held RIM in their portfolios at the end of Q3 and nearly 2,550 tickerspy members own the stock in their portfolios.
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