Jim Cramer Blog

The major market indices seesawed back and forth between positive and negative territory throughout the trading day before edging slightly higher following a two-day rally, as Wall Street weighed economic data and weak home sales prior to a speech by Fed Chairman Ben Bernanke tonight. The Dow posted a modest gain to close at 13,312. Meanwhile, the Nasdaq and S&P each closed fractionally higher to end at 2,668 and 1,470, respectively. Light, sweet crude rose 39 cents on the day to close at $91.01 for January delivery. Treasury prices closed higher, while gold tumbled to close at $802.30 an ounce. The dollar gained against the euro, and declined versus the yen.

On the economic front, a report from the Commerce Department showed that gross domestic product grew at an annual rate of 4.9% for the three-month period ending September 30th, its strongest growth in four years. The number was above the initial estimate of a growth rate of 3.9%. Despite the showing, the White House lowered its economic forecast for the coming year and now expects gross domestic product to grow by 2.7%. The administration's previous prediction was for a 3.1% increase. Elsewhere, a separate report from the Labor Department showed a spike in unemployment claims last week rising by 23,000 to 352,000, the highest level since February.
In earnings news, athletic clothing retailer Lululemon Athletica (Nasdaq: LULU - News) said its third-quarter profit more than tripled on earnings of $7.6 million, or 11 cents per share, versus $1.7 million, or 2 cents per share, a year earlier. Quarterly revenue jumped to $66.2 million, up from $36 million in 2006. Analysts, on average, had forecasted earnings of 8 cents per share on revenue of $63.2 million. Lululemon's stock was up 2.6% during the session.
Shares of Sears Holdings (Nasdaq: SHLD - News) were off -10.5% on the day after the company posted a sharp drop in third-quarter profit. For the period, Sears reported net income of $2 million, or 1 cent per share, down from $196 million, or $1.27 per share, a year ago. Revenue for the quarter was $11.5 billion, down -3% from $11.9 billion in 2006. On average, analysts were expecting a profit of 50 cents per share on $11.61 billion in sales. Subscribers can read our take on Sears Holdings in today's edition.
H.J. Heinz (NYSE: HNZ - News) announced a second-quarter profit of $227 million, or 71 cents per share, up 19% from $191.6 million, or 57 cents per share, last year. Quarterly revenue rose to $2.52 billion, up 13% from $2.23 billion a year earlier. Results were above analyst expectations looking for EPS of 67 cents on revenue of $2.4 billion. Shares of Heinz were up 0.7% at the bell. Subscribers can read our take on Heinz in today's edition.
In other corporate news, shares of E*Trade Financial (Nasdaq: ETFC - News) fell -8.7% in trading as the company announced it is getting a $2.5 billion cash infusion from a group lead by Citadel Investment Group. The embattled discount brokerage firm also announced that its CEO, Mitchell H. Caplan, has stepped down. E*Trade President and COO R. Jarrett Lilien will serve as interim chief until a new head is found.

By the BullMarket.com Staff

Labels: Ben Bernanke, ETFC, HNZ, LULU, Sears Holdings Corp., SHLD