Look for Clear Direction Come September (HNZ, BF.B, JOSB, DY, TSEM, JKS)
Stocks managed to eek out small gains today in another day of light trading that is typical for the week before Labor Day. The economic reports today were stronger than expected, with home sales data providing another indicator that housing has finally bottomed after being a major drag on the economy since 2008. GDP growth was also better than expected. Not necessarily robust, but better, which indicates the slow economic recovery continues. Hurricane Isaac drenched the Louisiana Coast with flooding rain but property and casualty stocks didn’t get hammered as damage appeared to be relatively modest, at least in comparison to the devastation wrought by Katrina. Overall, we wouldn’t put a lot of stock in what the market does over the next couple of days given the low volume. The real direction for stocks won’t be clear until September, when the pros in both Europe and the U.S. return from their summer holidays.
The Semiconductor Fabricator Stocks Index was the top performing tickerspy Index on the day, led by Tower Semiconductor (TSEM) with a 7% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with JinkoSolar Holding (JKS) down -14%.
The Dow Jones Industrial average added four points to close at 13, 107. The S&P 500 added one point to end at 1,410, while the Nasdaq closed at 3,081, up four points. Crude oil slipped by 73 cents to $95.60 per barrel. Gold dropped by $11.20 per ounce to end at $1,658.50.
In economic news, the Commerce Department said U.S. GDP rose 1.7% in the second quarter, topping the initial estimate of growth of 1.5%. U.S. GDP increased 2% in the first quarter. The National Association of Realtors, meanwhile, said pending home sales rose 2.4% in July. NAR projects existing home sales will increase 8%-9% this year.
In earnings news, H.J. Heinz (HNZ) reported a fiscal first-quarter profit of $258 million, or 80 cents per share, up from $226.1 million, or 70 cents per share, a year earlier. Sales fell 1.5% to $2.79 billion. Heinz notched a profit from continuing operations of 87 cents per share. Analysts expected 81 cents on revenue of $2.83 billion. The company still expects full-year EPS of $3.52-$3.62 a share. Shares of Heinz fell -2.25%. Nearly 30 pros held Heinz in their portfolios at the end of Q2 and more than 400 tickerspy members own the stock in their portfolios.
Liquor maker Brown-Forman (NYSE: BF.B) said its fiscal first-quarter profit climbed to $147.5 million, or 69 cents per share, from $118.1 million, or 54 cents per share, a year earlier. Revenue increased 4% to $878.1 million. Analysts expected a profit of 63 cents per share on sales of $901.8 million. The company expects a full-year profit of $2.40-$2.67 a share. Shares of Brown-Forman rose 2.3%.
Shares of Jos. A Bank (JOSB) surged 14.0% after the apparel retailer said its fiscal second-quarter profit climbed to $23.2 million, or 83 cents a share, from $20.6 million, or 74 cents a share, a year earlier. Same-store sales jumped 6.9% while overall sales increased 12.9% to $260.3 million. Analysts expected a profit of 73 cents on revenue of $251.1 million. Four pros counted Jos. A Bank among their top holdings at the end of Q2 and more than 80 tickerspy members own the stock in their portfolios.
Shares of Dycom Industries (DY) plunged -19.1% after the company posted a fiscal fourth-quarter profit of $13.3 million, or 39 cents per share, compared with $13 million, or 38 cents a share, a year earlier. Revenue climbed to $318 million from $303.7. Analysts expected a profit of 23 cents on revenue of $323.7 million.
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