Markets ended the day in positive territory though off session highs as optimism over the Fed announcing additional quantitative easing measures at the end of its two day meeting tomorrow lifted investor sentiment. Markets retreated at the end of the day as naysayers did not want to go into tomorrow long and on reports that Germany would not be using EU's rescue fund to buy bonds of troubled countries.
U.S. home building slowed in May amid a pull back in multifamily construction, but new permits granted reached their highest level since 2008, suggesting future demand for new houses. May Housing Starts were down 4.8% to 708k (722k expected) and May Building Permits were up 7.9% to 780k (730k expected)
Have a great evening!
Market Indices/Statistics:
- Dow closed up 95.51 pts/+0.75% to 12,837.33
- S&P closed up 13.20 pts/+0.98% to 1,357.98
- Nasdaq closed up 34.43 pts/+1.19% to 2,929.76
- 23 of the 30 Dow stocks closed higher
- 7 of 10 S&P 500 sectors closed up
- Materials was the most positive sector (+1.95%); Telecom was the biggest laggard (-0.21%)
- The VIX ended up 0.06 at 18.38
- Oil is up $0.90 to $84.50
- Nat Gas is down $0.079 to $2.620
- Gold is down $7.80 to $1,619.20
- Euro vs. Dollar is up $0.0110 to $1.2685
- Dollar vs. Yen is down $0.15 to $78.94
Top Headlines:
Bank of America (BAC, +$0.35/+4.5% to $8.11) was the leading Dow component, trading higher after reports ran that Swiss private banker Julius Baer was in preliminary discussions with the company to acquire its non-U.S. wealth management operations for $1.5-$2.0 billion.
J.C. Penney (JCP, -$2.08/-8.6% to $22.25) were under pressure again today after the company announced its relatively new president, Michael Francis, would be leaving the company. Francis was a key member of the team the company put together to restructure and transform the company’s strategies and image.
Microsoft Corp (MSFT, +$0.86/+2.9% to $30.70) shares were higher after the company unveiled its new tablet computer, known as the “Surface,” meant to compete with Apple’s iPad.
Walgreen Co. (WAG, -$1.87/-5.9% to $30.09) announced that it is taking a 45% stake in Alliance Boots Holding Ltd. for $6.7 billion in cash and stock which creates the world’s biggest buyer of prescription drugs. The stock was under pressure as investors were concerned by Walgreen’s decision to expand in Europe in the face of the euro zone financial crisis.
Earnings
Barnes & Noble (BKS, -$0.61/-4.0% to $14.63) reported EPS of ($1.08) vs. estimates of ($0.93); revenue was $1.38 billion, below the $1.48 billion expected by analysts. The company reported a bigger loss inits digital business and attributed the revenue decline in part to lower device sales at third party retailers and lower average selling prices for the devices.
Discover Financial Services (DFS, +$0.74/+2.3% to $33.57) reported EPS of $1.00, in line with expectations. Revenue was $1.8 billion, a bit lower than the $1.84 billion expected by analysts. Profit declined 11% as the company set aside more money to cover future loan losses which offset an increase in the loan balances.
FedEx Corp (FDX, +$2.50/+2.8% to $91.01) reported adjusted Q4 EPS of $1.99 vs. estimates of $1.92; revenue was $11.0 billion, below estimates of $11.13 billion. The company gave outlook for 2013 FY EPS $6.90-EPS $7.40 vs. estimates of $6.50 due in part to new cost cutting strategies targeting to offset softening volumes impacted by global financial woes.
Jefferies Group (JEF, -$0.02/-0.2% to $13.08) reported adjusted EPS of $0.31 vs. expectations of $0.28; revenue was $711 million, better than the $681.3 million expected by analysts. Although the company beat expectations, its second quarter was lower due to lower equity trading volumes and reduced earnings from its underwriting business. The company is looking to expand overseas to take market share from the banks that are scaling back their lending programs.
Earnings after the Bell
Adobe Systems (ADBE, -$0.27/-0.8% to $32.89) reported adjusted Q3 EPS of $0.60 vs. estimates of $0.59; revenue was $1.12 billion, better than estimates of $1.11 billion. Quarterly revenue was lower and the company cut its full year revenue outlook to account for decreasing demand in Europe which pressured the stock more than 1% in late night trading. The company also narrowed its FY 2012 adjusted EPS outlook to $2.40-$2.46 from $2.38-$2.48 .
Coming Wednesday:
Economic Reports: Weekly Mortgage Applications (+18.0% previously) at 7:00 a.m. and FOMC Rate Decision (unch at 0.25% expected) Earnings: Actuant Corp. (est:$ 0.59), CLARCOR Inc. (est:$ 0.7), JinkoSolar Hldg Co. Ltd. ADS (est:$ -0.81), Red Hat Inc. (est:$ 0.27), Steelcase Inc. (est:$ 0.12), Bed Bath & Beyond Inc. (est:$ 0.84), Micron Tech Inc. (est:$ -0.2), Sonic Corp. (est:$ 0.22)
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