Downward Drift (DE, JCP, ANF, ABMD, SINA, URZ)
Stocks continued their downward trend, brushing off some solid economic data. The Fed minutes, however, took a cautious tone, warning of a possible fiscal cliff due to the end of previous tax cuts and the government reducing spending. Worries that Greece will leave the European Union also continued to weigh on the market. We continue to think stocks will likely continue to drift lower, but that now is the time to start to just dip a toe as part of a dollar cost averaging strategy.
The Social Networking Stocks Index was the top performing tickerspy Index on the day, led by SINA (SINA) with a 11% gain. The Uranium Stocks Index was the day’s worst performing tickerspy Index, with Uranerz Energy (URZ) down -11%.
Stocks fell on the day, led lower by a -20 point, or -0.7%, decline in the Nasdaq to 2,874. The Dow slipped -33 points to 12,599, while the S&P lost -6 points to close at 1,325. Oil dropped -$1.17 to $92.81 a barrel, while gold fell -$20.50 to $1,536.60 an ounce.
In economic news, the Federal Reserve said U.S. industrial production rose 1.1% in April following a 0.6% drop in March. Economists had expected a 0.6% increase in April. The Commerce Department, meanwhile, said housing starts jumped 2.6% in April to a 717,000 annual rate from March’s revised 699,000 clip. Economists were expecting an annual rate of 680,000.
In earnings news, shares of agricultural equipment maker Deere (DE) fell -3.2% despite the company reporting fiscal second-quarter results that topped Wall Street estimates. Illinois-based Deere said it earned $1.06 billion, or $2.61 per share, up from $904 million, or $2.12 per share, a year earlier. Revenue rose 12% to $10.0 billion from $8.9 billion. For the current quarter, Deere expects equipment sales of $9.65 billion, ahead of the $9.11 billion analysts were expecting. Deere also raised its full-year net income forecast to $3.35 billion from $3.28 billion. Analysts were expecting $3.24 billion. Nearly 50 pros held Deere in their portfolios at the end of Q1 and nearly 1,430 tickerspy members own the stock in their portfolios.
Shares of J.C. Penney (JCP) plunged -19.7% after the company said its fiscal first-quarter loss widened to -$163 million, or -75 cents a share, from -$64 million, or -28 cents a share, a year earlier. Revenue slid -20% to $3.15 billion. Same-store sales tumbled almost -19%, worse than the fall of -11.4% analysts had expected. Analysts had expected a loss of -10 cents on sales of $3.46 billion. The Texas-based company also suspended its dividend in an effort to conserve cash.
Shares of apparel retailer Abercrombie & Fitch (ANF) slid -13.0% after the company said its first-quarter profit plunged -88% to $3 million, or 3 cents per share, from $25.1 million, or 28 cents per share, a year earlier. Revenue climbed to $921.2 million from $836.7 million. Analysts had expected a profit of 2 cents a share on sales of $951.1 million. Same-store sales fell -5%. Abercrombie reiterated its full-year EPS guidance of $3.50-$3.75 a share. Analysts were expecting $3.57 a share. Ten pros counted Abercrombie among their top holdings at the end of Q1 and nearly 200 tickerspy members own the stock in their portfolios.
Medical device maker Abiomed (ABMD) reported a fiscal fourth-quarter profit of $2.6 million, or 6 cents a share, on revenue of $37.3 million. Revenue jumped 31% to $37.3 million. Analysts had expected a profit of 6 cents on sales of $35.0 million. The company forecast fiscal 2013 revenue of $152-$157 million, above the $150 million consensus. Shares of Abiomed fell -2.2%.
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