Stock Market Wrapup Aug. 23rd
CFCStocks meandered most of the day as credit concerns continued to pressure the market. Bulls were hesitant to keep the recent rally going as Bears attempted to gain control. At the close, the tug-of-war ended with the Dow ending essentially flat on the session. Both the Nasdaq and S&P finished in negative territory. Oil, on the other hand, rose 57 cents to close at $69.83.
In economic news, the Labor Department said that initial jobless claims fell by -2,000 to 322,000, the lowest level since August. The four-week average, meanwhile, rose by 4,750 to 317,750. The number of people continuing to collect unemployment benefits rose by 16,000 reaching 2.57 million.
In corporate news, shares of the nation's largest mortgage company Countrywide Financial (NYSE: CFC - News) rose 0.9% after it announced that banking behemoth Bank of America (NYSE: BAC - News) has invested $2 billion in the company. Under the terms of the deal, Bank of America has acquired $2 billion in the form of convertible preferred stock yielding 7.25% annually. It will not have any voting rights under the preferred shares. It will have the option of converting its shares into common shares of the company at a price of $18 a share, a steep discount to the current value of CFC's stock price. The investment comes in the midst of an industry-wide shakeout following a severe credit crunch.
With much of the earnings season in the books, specialty retailers seem to be the last in line to report. Clothing retailer Children's Place (Nasdaq: PCLE - News) today reported a loss of -$27.1 million on sales of $424.3 million for its second quarter. EPS numbers weren't supplied due to an SEC inquiry. Same-store sales fell -1%. It also cut its full-year profit forecast to $2.25-2.40 a share, well below its previous range of $3.45-3.55 a share. Shares plunged -16.9% on the earnings announcement and also on news that it is experiencing troubles with its licensing deal with Disney (NYSE: DIS - News).
Video game retailer GameStop (NYSE: GME - News), conversely, blew the cover off its second-quarter earnings. For Q2, it said net income reached $21.8 million, or 13 cents a share, significantly higher than the $3.18 million, or 2 cents a share, profit it recorded last year. Sales surged 39% to $1.34 billion from $963 million in the same period a year ago. Same-store sales grew by 29% in its latest quarter. The numbers beat analyst estimates of 9 cents a share on sales of $1.19 billion. Shares surged 9.3%.
On the M&A front, a couple of small deals were announced. Technology giant IBM (NYSE: IBM - News) said it acquired privately held WebDialogs, which specializes in Web conferencing. Financial terms of the deal were not publicly disclosed. WebDialogs will become part of IBM's software group. Elsewhere, food company Hormel Foods (NYSE: HRL - News) agreed to buy cooked meat producer Burke for $110 million. Hormel said the deal will be accretive to earnings in its fiscal year 2008 and will give $125 million in sales to the company. Shares rose 1.1%.
By the BullMarket.com Staff
In economic news, the Labor Department said that initial jobless claims fell by -2,000 to 322,000, the lowest level since August. The four-week average, meanwhile, rose by 4,750 to 317,750. The number of people continuing to collect unemployment benefits rose by 16,000 reaching 2.57 million.
In corporate news, shares of the nation's largest mortgage company Countrywide Financial (NYSE: CFC - News) rose 0.9% after it announced that banking behemoth Bank of America (NYSE: BAC - News) has invested $2 billion in the company. Under the terms of the deal, Bank of America has acquired $2 billion in the form of convertible preferred stock yielding 7.25% annually. It will not have any voting rights under the preferred shares. It will have the option of converting its shares into common shares of the company at a price of $18 a share, a steep discount to the current value of CFC's stock price. The investment comes in the midst of an industry-wide shakeout following a severe credit crunch.
With much of the earnings season in the books, specialty retailers seem to be the last in line to report. Clothing retailer Children's Place (Nasdaq: PCLE - News) today reported a loss of -$27.1 million on sales of $424.3 million for its second quarter. EPS numbers weren't supplied due to an SEC inquiry. Same-store sales fell -1%. It also cut its full-year profit forecast to $2.25-2.40 a share, well below its previous range of $3.45-3.55 a share. Shares plunged -16.9% on the earnings announcement and also on news that it is experiencing troubles with its licensing deal with Disney (NYSE: DIS - News).
Video game retailer GameStop (NYSE: GME - News), conversely, blew the cover off its second-quarter earnings. For Q2, it said net income reached $21.8 million, or 13 cents a share, significantly higher than the $3.18 million, or 2 cents a share, profit it recorded last year. Sales surged 39% to $1.34 billion from $963 million in the same period a year ago. Same-store sales grew by 29% in its latest quarter. The numbers beat analyst estimates of 9 cents a share on sales of $1.19 billion. Shares surged 9.3%.
On the M&A front, a couple of small deals were announced. Technology giant IBM (NYSE: IBM - News) said it acquired privately held WebDialogs, which specializes in Web conferencing. Financial terms of the deal were not publicly disclosed. WebDialogs will become part of IBM's software group. Elsewhere, food company Hormel Foods (NYSE: HRL - News) agreed to buy cooked meat producer Burke for $110 million. Hormel said the deal will be accretive to earnings in its fiscal year 2008 and will give $125 million in sales to the company. Shares rose 1.1%.
By the BullMarket.com Staff
posted by Stock Administrator @ 6:12 PM
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