Stock Market Wrapup Sept. 18th
Stocks opened the session on a strong note after key economic data sent bulls buying. In the late afternoon hours, stocks surged after the Fed cut both the discount and Fed funds rate by -50 basis points. At the close, the Dow ended with a gain of 336 points, while the tech-heavy Nasdaq gained 70 points. The S&P 500 was the largest gainer of the big three indices, rising 2.9%. Oil, meanwhile, added 94 cents to finish the session at $81.51 a barrel.
In economic news, the Labor Department said that producer prices fell more than expected in August. The PPI fell -1.4% for the month, following a 0.6% rise in July. Core prices, which exclude food and fuel costs, rose 0.2%. In housing-related news, the National Association of Home Builders said that confidence among homebuilders tied a record low in September. Its index in collaboration with Wells Fargo declined to 20. A reading below 50 signals that conditions are poor. Additionally, according to RealtyTrac, foreclosures more than doubled from year-ago levels, as the rate at which homes were foreclosed increased by 115% in the month compared to a year ago, and 36% from July levels.
On the earnings front, troubled investment firm Lehman Brothers (NYSE: LEH - News) reported third-quarter earnings that came in ahead of what analysts were forecasting. For the quarter, the company reported earnings of $1.54 a share, a full 7 cents higher than estimates. Profit dropped -3% to $887 million from the year-ago period and -29% from the second quarter. Total revenues rose 2% to $4.3 billion, but were down -22% sequentially. The company noted that during the quarter it recorded substantial reductions, mostly on leverage loan commitments and residential-mortgage related positions. Net reduction in revenues totaled about $700 million in the quarter. Due to the recent credit market turmoil, the company saw revenue in its capital market business drop by -14% and -47% in its fixed income business. Shares rallied on the news, up 10.0% on the session.
Electronics retailer Best Buy (NYSE: BBY - News) easily topped Wall Street expectations for its second quarter, as strong international sales and robust sales of computers boosted results. For the quarter, the company earned $250 million, or 55 cents a share, up from $230 million, or 47 cents a share, last year. Sales totaled $8.75 billion compared to $7.6 billion last year, a 15% rise. Same-store sales rose 3.6%. The company noted that it expects full-year earnings to be at the top half of its range of $3.00-3.15 a share, higher than its previous outlook of $2.95-3.15 a share. Shares gained 6.6%
Continuing with retailing earnings, auto parts company Autozone (NYSE: AZO - News) said profits rose to $217.2 million, or $3.23 a share, up from $213.5 million, or $2.92 a share, last year. Revenue rose 3% to $2 billion from $1.94 billion last year. The company cited gross margin improvement as well as supply chain efficiencies. Same-store sales in its domestic business fell -0.2%. Even though the company missed analyst earnings expectations of $3.25 a share and revenue estimates of $2.03 billion, shares rose 4.1%
Shares of online brokerage E*Trade Financial (Nasdaq: ETFC - News) were off by -1.5% after the company announced after the bell on Monday that it will be exiting the wholesale-mortgage business. The company said it will set aside $245 million, resulting in charge-offs of $95 million. Because it is exiting the business, E*Trade cut its 2007 EPS forecast to a range of $1.05-1.15, down from $1.53-1.67.
By the BullMarket.com Staff
In economic news, the Labor Department said that producer prices fell more than expected in August. The PPI fell -1.4% for the month, following a 0.6% rise in July. Core prices, which exclude food and fuel costs, rose 0.2%. In housing-related news, the National Association of Home Builders said that confidence among homebuilders tied a record low in September. Its index in collaboration with Wells Fargo declined to 20. A reading below 50 signals that conditions are poor. Additionally, according to RealtyTrac, foreclosures more than doubled from year-ago levels, as the rate at which homes were foreclosed increased by 115% in the month compared to a year ago, and 36% from July levels.
On the earnings front, troubled investment firm Lehman Brothers (NYSE: LEH - News) reported third-quarter earnings that came in ahead of what analysts were forecasting. For the quarter, the company reported earnings of $1.54 a share, a full 7 cents higher than estimates. Profit dropped -3% to $887 million from the year-ago period and -29% from the second quarter. Total revenues rose 2% to $4.3 billion, but were down -22% sequentially. The company noted that during the quarter it recorded substantial reductions, mostly on leverage loan commitments and residential-mortgage related positions. Net reduction in revenues totaled about $700 million in the quarter. Due to the recent credit market turmoil, the company saw revenue in its capital market business drop by -14% and -47% in its fixed income business. Shares rallied on the news, up 10.0% on the session.
Electronics retailer Best Buy (NYSE: BBY - News) easily topped Wall Street expectations for its second quarter, as strong international sales and robust sales of computers boosted results. For the quarter, the company earned $250 million, or 55 cents a share, up from $230 million, or 47 cents a share, last year. Sales totaled $8.75 billion compared to $7.6 billion last year, a 15% rise. Same-store sales rose 3.6%. The company noted that it expects full-year earnings to be at the top half of its range of $3.00-3.15 a share, higher than its previous outlook of $2.95-3.15 a share. Shares gained 6.6%
Continuing with retailing earnings, auto parts company Autozone (NYSE: AZO - News) said profits rose to $217.2 million, or $3.23 a share, up from $213.5 million, or $2.92 a share, last year. Revenue rose 3% to $2 billion from $1.94 billion last year. The company cited gross margin improvement as well as supply chain efficiencies. Same-store sales in its domestic business fell -0.2%. Even though the company missed analyst earnings expectations of $3.25 a share and revenue estimates of $2.03 billion, shares rose 4.1%
Shares of online brokerage E*Trade Financial (Nasdaq: ETFC - News) were off by -1.5% after the company announced after the bell on Monday that it will be exiting the wholesale-mortgage business. The company said it will set aside $245 million, resulting in charge-offs of $95 million. Because it is exiting the business, E*Trade cut its 2007 EPS forecast to a range of $1.05-1.15, down from $1.53-1.67.
By the BullMarket.com Staff
posted by Stock Administrator @ 10:04 PM
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