The FedEx Bump (FDX, DFS, WGO, NVLS, LRCX, ZOLL, CAGC)

Stocks finished higher on the day, bolstered by a solid report and outlook from FedEx (FDX), although the major market averages closed well off their highs. The U.S. economic data, meanwhile, continues to be positive. However, Europe’s financial woes continue to linger in the background, which keeps us cautiously neutral on stocks at this time.

The Medical Appliances and Equipment Stocks Index was the top performing tickerspy Index on the day, led by Zoll Medical (ZOLL) with a 29% gain. The Chinese Agriculture Stocks Index was the day’s worst performing tickerspy Index, with China Agritech (CAGC) down -12%.

Stocks rose on the day, with the Dow up 45 points to 11,869. The S&P added 4 points to 1,216, while the Nasdaq edged up 2 points to 2,541. Oil fell -$1.08 to $93.87 a barrel, while gold slipped -$9.70 to $1,577.20 an ounce.

In economic news, new claims for jobless benefits fell -19,000 to a seasonally adjusted 366,000 last week, good for the lowest reading since May 2008. Analysts had expected a reading of 390,000. The Labor Department, meanwhile, said that its producer price index rose by 0.3% in November after falling -0.3% in October. Economists had expected an increase of 0.2%. Core PPI, which excludes food and energy, edged up 0.1%, below the 0.2% increase economists had expected. Elsewhere, the Federal Reserve Bank of Philadelphia said its measure of manufacturing activity in the region rose to 10.3 in December from 3.6 in November. Economists had expected a December reading of 5.0.

Shares of FedEx surged 8.0% after the company posted a fiscal second-quarter profit of $497 million, or $1.57 per share, compared with $283 million, or 89 cents per share a year earlier. Revenue climbed 10% to $10.59 billion. Analysts had expected a profit of $1.53 per share. The company guided for EPS in the current quarter to range from $1.25 to $1.45 per share and it maintained its full-year outlook that calls for profit per share to range from $6.25 to $6.75. Analysts were looking for the company to report $1.31 in Q3 and $6.28 for the full year. Twenty-five pros held FedEx in their portfolios at the end of Q3 and almost 460 tickerspy members own the stock in their portfolios.

Credit card issuer Discover Financial (DFS) said its fiscal fourth-quarter profit rose 46% to $508 million, or 95 cents per share, from $347 million, or 64 cents per share, a year earlier. Revenue climbed 13% to $1.81 billion. Analysts had expected a profit of 89 cents per share on $1.81 billion in revenue. However, the firm setting aside $319 million to cover uncollected bills spooked investors, and the stock fell -3.2%. Twenty pros held Discover Financial in their portfolios at the end of Q3 and nearly 200 tickerspy members own the stock in their portfolios.

Winnebago Industries (WGO), the maker of recreational vehicles (RVs), said its fiscal first-quarter profit tumbled -73% to $1.0 million, or 4 cents per share, from $3.8 million, or 13 cents per share, a year earlier. Revenue rose 7% to $131.8 million. Analysts had expected a profit of 6 cents per share. The stock finished flat.

Shares of chip equipment maker Novellus (NVLS) soared 16.3% after rival Lam Research (LRCX) agreed to buy the company for $3.3 billion in stock, a deal that values Novellus at a 28% premium to Wednesday’s closing price. Lam and Novellus stockholders will own about 59% and 41% of the combined company, respectively.

Tags: CAGC, DFS, FDX, LRCX, NVLS, WGO, ZOLL