Jim Cramer Blog

Throughout the day, the S&P 500 was on record watch as it remains 3.34 away from a record close. For a short time today, it actually rose above the record close, but while both the S&P and the Dow were up late, both ended up closing down on the day. However, this was not before the DJIA set a record for an intraday high. The Nasdaq, on the other hand, closed up almost half a percent. As investors waited for news from the China conference and for economic indicators, the Dow floated up and down on a day of unsure trading. However, acquisitions continued to make front-page news.

The United States government's NOAA released its hurricane report for this season, in which the prediction was not good. The report predicted higher-than-normal storm activity for the season and that the Gulf Coast might be in the path of some of those storms. With refineries and drilling units in the Gulf of Mexico still not having fully recovered from Katrina, there is doubt as to whether or not another storm would completely dismantle the production capabilities of the region. It is expected that prices at the pump will rise; however, today the price of oil decreased as contracts set to expire were unloaded and the U.S weekly inventory report was set to be released.
In M&A news, MGM Mirage (NYSE: MGM - News) and other casino stocks rose today as Kirk Kerkorian expressed an interest in MGM's Las Vegas properties. Kerkorian's Tracinda Corp. is also the majority shareholder for MGM Mirage, holding 56% of the stock, and is looking to explore options in that regard. Shares of the stock closed up 27.1%.
Fremont General Corp (NYSE: FMT - News) a subprime mortgage lender, announced that it would sell its commercial real estate division to IStar Financial Inc. (NYSE), another real estate lending company, for $1.9 billion. It also plans to oust its top executives and sell a minority stake in the remaining business for $80 million. The cash infusion will allow the firm to stay in business after suffering losses when the subprime market collapsed. Fremont shares rose 40.7%
In earnings news, BJ's Wholesale Club (NYSE: BJ - News) released its first-quarter earnings today, the first full quarter in which CEO Herb Zarkin was back at the helm. The company suffered an -11% drop in profits, and earnings per share fell -2 cents to 21 cents. However, net sales were up 8% and same-store sales rose 2.3%. The stock finished up 1.8%.
Office supply retailer Staples (Nasdaq: SPLS - News) released its first-quarter earnings today as well. Unlike BJ's, it was able to report increased profits and sales both in North America and internationally. Sales rose 8%, but missed the consensus. Year over year, net income rose 12%. A cautious outlook and sluggish sales sent shares -2.4% lower.

By the BullMarket.com Staff

Labels: BJ, FMT, MGM, SPLS