Briefing.com
Guess's Guidance Wears Well
Price level vs. 4 pm ET: The major averages closed lower on Tuesday, as comments from Federal Reserve Chairman Ben Bernake and concerns about stubborn inflation weighed on investor sentiment and hopes for a reduction in interest rates any time soon.
Also behind the stock market's decline was a better than expected report on the service sector. The ISM's report came in at 59.7 in May, higher than Briefing.com consensus of 56.0 and up from the 56.0 reported for April.
After closing in record territory on Monday, the Dow Jones industrials closed down 0.59%. The broader S&P 500 and the tech-heavy Nasdaq also ended lower, slipping 0.53% and 0.27%, respectively, for the session.
All ten economic sectors posted losses today.
A slightly upbeat tone, however, dictates the after hours session. The S&P 500 futures, at 1533.60, are about a point above fair value, while the Nasdaq 100 futures, at 1936.00, are slightly above fair value.
| Company | Stock Move | Reason for Move |
| Guess? (GES) | 50.00 +2.58 (+5.44%) | Guess reported Q1 (Apr) earnings of $0.38 per share, $0.09 better than the Reuters Estimates consensus of $0.29. Revenues rose 42.3% year/year to $377.9 mln vs the $331.6 mln consensus. Co issued upside guidance for Q2, sees EPS of $0.31-0.33 vs. $0.27 consensus. It sees Q1 revs of $335-345 mln vs. $308.47 mln consensus. Co raised EPS guidance for FY08 to EPS of $1.75-1.80 vs. $1.71 consensus, up from $1.65-1.70; sees FY08 revs of $1.51-1.56 bln vs. $1.49 bln consensus. The Co also announced the financial results for the five-week transition period ended February 3, 2007 and the results for the recast Q4 and year ended February 3, 2007. The five-week transition period resulted from the Co's decision to change its fiscal year.
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| TD Ameritrade (AMTD) | 20.67 +0.72 (+3.60%) | Jana and SAC Capital suggest SCHW and ETFC as merger partners. |
| Oxford Industries (OXM) | 43.78 -0.42 (-0.95%) | Co lowered Q4 guidance. It sees Q4 EPS of $1.00-1.05, and Q4 EPS of $0.96-1.01 adjusted for unusual items, compared to previous guidance of $1.07-1.14, vs $1.03 Reuters consensus. It sees Q4 revs in the lower half of its previously issued rev guidance of $285-295 mln vs $290.43 mln Reuters consensus. Co sees Q1 EPS from continuing operations of $0.46-0.51 vs $0.68 Reuters consensus. Co sees Q1 revs of $245-255 mln vs $292.72 two analyst consensus. Co sees Y08 EPS from continuing operations of $3.10-3.25 vs $3.33 Reuters consensus. Co said continued weakness in the tailored clothing sector depressed the results of the Menswear Group for Q4. Co believes that below plan results at many retailers for the combined months of March and April led to shipment deferrals and tight selling windows.
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| Altera (ALTR) | 23.15 +0.22 (+0.96%) | Altera reaffirmed that it expects second quarter sales to be 1-4% higher than 1Q07 (roughly $308-317 mln vs. $313.0 mln consensus). The co said its new product category is showing strong growth in comparison to the similar period in the prior quarter, with all products growing sequentially.
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Only a handful of notable companies are expected to report their results on Wednesday. They include ADC Telecommunications (ADCT), SAIC Inc. (SAI), and Shuffle Master (SHFL) - all of which will come after the close.
In terms of economic data, a revision to Q1 Productivity is expected to be released at 8:30 ET. That will followed by the Energy Dept.'s weekly oil report at 10:00 ET, which will garner added attention given the recent rise in prices at the pump.
--Richard Jahnke, Briefing.com
_____________________________________________________________Rate Cut Hopes Dashed Again
[BRIEFING.COM] After being down as much as 125 points on the Dow, and all three major averages off 0.9% at their lows, the bulls made a late-day effort Tuesday to pare market losses. However, that effort was a losing one as the bears held the upper hand in today's trading.
The main excuse to take some money off the table today was predicated largely on bond yields hitting their highest levels since last summer.
In the midst of another slow news day, all eyes this morning were on Fed Chairman Bernanke; investors were hoping he might drop some hints of a possible rate cut. To the dismay of both stock and bond investors, his prepared remarks about housing and the economy offered nothing new frankly compared to recently released minutes from the May 9 FOMC meeting.
Throw in the strongest reading on the ISM Services Index since April 2006 and bond traders became increasingly convinced that the Fed is far from easing anytime soon. Fed funds futures now price in less than a 10% chance of a rate cut by November. Goldman Sachs, which had been expecting the Fed to cut the overnight lending rate 75 basis points to 4.50% this year, altered its view today and now doesn't see any rate cuts at all in 2007.
The absence of any upside sector leadership also posed a problem for the bulls to extend the S&P 500's winning streak to seven and close the broader market at another new all-time high.
Of the 10 sectors closing lower, Utilities (-1.5%) paced the way as rising bond yields made the sector's income-oriented appeal less attractive. The rate-sensitive Financials sector (-0.6%) also suffered as the yield on the 10-year note closed at a nine-month high of 4.97%. The yield on the 5-year note hit 5.00% for the first time since August.
Telecom turned in the next worst performance, but its decline wasn't surprising as it too ranks among this year's best performing sectors. Consumer Discretionary (-0.7%) ranked third among the day's disappointments as a Q1 profit warning from Bed Bath & Beyond (BBBY 38.27 -2.20) left Home Furnishings (-5.4%) as the session's worst performing S&P industry group.
Homebuilding (-1.3%), which was also hit by today's rise in borrowing costs, was under additional pressure after Bernanke said "tighter lending standards... will serve to restrain housing demand."
..DJTA -0.7%. ..DJUA -1.5%. ..SOX -0.7%. ..DOT -0.1%. ..XOI -0.7%. ..BTK -0.3%. ..Nasdaq 100 -0.1%. ..S&P Midcap 400 -0.6%. ..Russell 2000 -0.8%.
Siao...what's GS thinking? 4.5%...that's all speculative. As traders, we don't need to care, just ride on the news and make money. Last night I finally got my first scalping profit, only to lose it again later in the day...zzz. Nvm, live to fight another day, tonight looks like a good up night!
No analysis done yesterday. So no closing price accuracy and directional correctness update.
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