Can You Profit From This Retail News?
After
a flat open, the major indexes went into to sell mode, with retail
stocks leading the charge down. Bad sales news from McDonalds and Target have
weighed in on negative sentiment, with “as expected” economic news failing to
provide any catalyst to the upside. The U.S. Dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating), -0.37 at
104.15., has come under pressure as it hit a three-year low against the Euro
(
ECH3 |
Quote |
Chart |
News |
PowerRating), +4.50 102.28. Meanwhile oil
(
CLH3 |
Quote |
Chart |
News |
PowerRating), -.12 at 29.98, and
gold
(
GCH3 |
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Chart |
News |
PowerRating), -.10 at 337.50, have given back some of their recent
gains.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) is -0.74% at 8,563.29 The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) is
-0.58% at 905.16. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) is  -0.20% at 1,397.50.
Leading to the upside are
telecoms
(
$IXTC.X |
Quote |
Chart |
News |
PowerRating), +1.54%, utilitiesÂ
(
$UTIL.X |
Quote |
Chart |
News |
PowerRating),
+1.05%, and Internet
(
$MOX.X |
Quote |
Chart |
News |
PowerRating), +1.05%.
The biggest losers are gold
and silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), -2.08%, retail
(
$RLX.X |
Quote |
Chart |
News |
PowerRating), -2.00%,
oil service
(
$OSX.X |
Quote |
Chart |
News |
PowerRating), -1.92%, and natural gas
(
$XNG.X |
Quote |
Chart |
News |
PowerRating), -1.35%.
In economic news, the CPI
rose 0.1% vs. expectations of no change; core CPI rose 0.2% vs. an
expected rise of 0.1%,;housing starts were at 1.697M just about right in
line with an expected 1.7M; building permits came in at 1.725M vs.
expectations of 1.720M; industrial production rose 0.1% vs. an
expectations of no change; and capacity utilization rose 75.6% vs.
expectations of 75.3%.
The 10-year U.S. Note
is +040 at 112 105.
The Dollar is -0.37 at
104.15.
Volume is at 596,847,000
on the NYSE, and 691,051,000 on the Nasdaq.
Market breadth is negative,
with NYSE declining issues over advancing issues by a ratio of 1.50, and down
volume over up volume by a 2.12 ratio. Nasdaq advancing issues over declining
issues came are at 1.56, and down volume is over up volume by a 1.10 ratio.
The biggest Dow gainers are:
Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating),
+2.63% at 19.45, SBC Communications
(
SBC |
Quote |
Chart |
News |
PowerRating), +2.43% at 27.79,
International Paper
(
IP |
Quote |
Chart |
News |
PowerRating), +1.02% at 35.46, Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating), +0.86%
at 24.36, JP Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating), 0.80% at 25.00, and Walt Disney
(
DIS |
Quote |
Chart |
News |
PowerRating),
+0.65% at 16.89.
Stocks in the news:
Retailer Target
(
TGT |
Quote |
Chart |
News |
PowerRating),
-6.32% at 29.79, has announced that same-store sales were tracking below
expectations, as it looks for a 3% to 5% increase for the month.
In the electronic retailing
business, Best Buy
(
BBY |
Quote |
Chart |
News |
PowerRating), -5.43% at 24.02, beat its
third-quarter earnings expectations by $0.01 with profits of $0.26 per share,
though lowered guidance for the fourth-quarter. And Circuit City
(
CC |
Quote |
Chart |
News |
PowerRating),
-8.18% at 7.52, beat its third-quarter earnings by $0.03 with profits of $0.10
per share.
Discount retailer Walgreen’s
(
WAG |
Quote |
Chart |
News |
PowerRating), +0.44% at 29.06, has been upgraded by Lehman Brothers to “overweight”
from “equal-weight.”
Fast food giant McDonalds
(
MCD |
Quote |
Chart |
News |
PowerRating), -8.91% at 15.83, has lowered its fourth-quarter earnings guidance to
$0.25-$0.26 per share vs. an analyst consensus of $0.32 per share.
Chip stocks are trying
establish strength as a sector, with Xilinx
(
XLNX |
Quote |
Chart |
News |
PowerRating), +3.98% at at
22.72, Teradyne
(
TER |
Quote |
Chart |
News |
PowerRating), +3.56% at 14.80, LSI Logic
(
LSI |
Quote |
Chart |
News |
PowerRating),
+1.87%a t 6.52, and Micron Technology
(
MU |
Quote |
Chart |
News |
PowerRating), +2.74% at 13.86.
UBS Warburg has initiated
coverage on United Parcel Service
(
UPS |
Quote |
Chart |
News |
PowerRating), -0.42\9% at 63.96 and
Federal Express
(
FDX |
Quote |
Chart |
News |
PowerRating), -0.11% at 53.42, at “hold.”
Software and programming
company Take-Two Interactive
(
TTWO |
Quote |
Chart |
News |
PowerRating), +3.29% at 25.70, beat its
fourth-quarter earnings consensus by $0.06 per share with profits of $0.54 per
share. The company has also has issued first-quarter earnings guidance of $1.14
a share vs. an analyst consensus of $0.99 a share.