The Market Wants to Rally (RIMM, ADBE, DRI, ZNGA, BTX, SHFL)
On a day filled with mixed earnings news, a poorly received high-profile IPO, and a ratings agency warning of possible European sovereign debt downgrades, the major market averages finished mixed. The market has seemingly wanted to rally the past two days, but both times stocks met resistance and finished well off their highs. With Europe still the main focus of investors, we remain cautious in the near term.
The Stem Cell Stocks Index was the top performing tickerspy Index on the day, led by BioTime (BTX) with a 14% gain. The Gaming and Slot-Machine Stocks Index was the day’s worst performing tickerspy Index, with Shuffle Master (SHFL) down -5%.
Stocks finished the day mixed, with the Dow down -3 points to 11,866. The S&P rose 4 points to 1,220, while the Nasdaq advanced 14 points to 2,555. Oil slipped -34 cents to $93.53 a barrel, while gold jumped $20.70 to $1,597.90 an ounce.
In economic news, the Labor Department said the consumer price index for November was unchanged, while core CPI, which excludes food and energy, rose 0.2%. Economists had expected the November reading to increase 0.1% for both.
Shares of BlackBerry maker Research In Motion (RIMM) plunged -11.2% after the company issued weak guidance and said its next generation smartphones won’t be available until late 2012. Its fiscal third-quarter profit fell to $265 million, or 51 cents per share, compared with $911 million, or $1.74 per share, a year earlier as revenue dropped -6% to $5.2 billion. Adjusted EPS was $1.27, above the $1.19 consensus. The company said it expects a fourth-quarter profit of 80-95 cents a share on revenue of $4.6-$4.9 billion. Analysts were expecting a profit of $1.15 a share on revenue of $5.04 billion.
Shares of software maker Adobe (ADBE) climbed 6.6% after the company reported an adjusted fourth-quarter profit of 67 cents a share on a 14% jump in revenue to $1.15 billion. Reported earnings fell -35% to $173 million, or 35 cents a share, from $269 million, or 53 cents a share, a year ago. Analysts were expecting a profit of 60 cents per share on revenue of $1.09 billion. Ten pros counted Adobe among their top holdings at the end of Q3 and nearly 375 tickerspy members own the stock in their portfolios.
Darden Restaurants (DRI) said its fiscal second-quarter profit fell to $53.7 million, or 40 cents per share, from $74.5 million, or 53 cents per share, a year earlier as sales rose to $1.8 billion from $1.7 billion. Same-store sales rose 1.8% at its Red Lobster, Olive Garden and LongHorn Steakhouse brands, but declined -2.5% at Olive Garden. Analysts had expected a profit of 41 cents a share after the company lowered its guidance earlier. For fiscal 2012, Darden expects profit growth of 4-7% on sales growth of 6-7%. Shares of Darden fell -0.2%. Nine pros pros counted Darden among their top holdings at the end of Q3 and nearly 160 tickerspy members own the stock in their portfolios.
Shares of newly public online games maker Zynga (ZNGA) fell -5.0% in their first day of trading. The IPO priced at the top end of the range at $10 and traded as high as $11.50 before falling back. Zynga makes the popular Farm Ville game, among other titles, for Facebook.
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