Spain Leads the American Rally — Thursday’s IP Market Recap

by Marc Bastow | September 27, 2012 5:02 pm

[1]U.S. stocks moved ahead with strength and conviction on Thursday, even though economic reports released in the morning painted a mixed picture.

However, Spain released its official 2013 budget, showing that the country’s government is prepared to move ahead with austerity cuts, and what was a mild rally turned decidedly upward in the afternoon. The rally snapped a five-day losing streak.

For the record, the Nasdaq finished up 1.39% to 3,136, the S&P 500 closed up 0.96% at 1,447, and the Dow Jones Industrial Average finished ahead 0.54% to 13,485.

Domestic growth continues to lag, as second-quarter GDP numbers were revised down to 1.3% from the 1.7% reported in August. At the same time, slower durable goods orders and pending home sales lagged. Pending home sales actually dropped by 2.6% instead of the expected 0.5% increase. In the day’s only good news on the domestic front[2], the number of first-time claims for unemployment benefits fell, hitting its lowest level since July.

On the earnings front, banking and credit-card services company Discover Financial (NYSE:DFS[3]) rose over 6% on the day after announcing[4] Street-beating revenues and earnings for the fiscal third-quarter, powered by loan growth and falling delinquency rates. Thursday’s bump continued the company’s strong run[5] for the year.

InvestorPlace Dependable Dividend Stock[6] McCormick & Co. (NYSE:MKC[7]) announced it beat earnings estimates but missed revenue expectations during the third quarter, and increased guidance for the remainder of the year, but the stock slid about 2%. Retailer Hennes & Mauritz (PINK:HNNMY[8]), better known as H&M, closed 4% lower after missing revenue and earnings forecasts[9] for the third quarter.

Tempur-Pedic (NYSE:TPX[10]) announced it was buying mattress competitor[11] Sealy (NYSE:ZZ[12]) for $228 million, or $2.20 per share. Bank of America (NYSE:BAC[13]) will provide Tempur-Pedic with $1.77 billion to finance the acquisition and the retirement of some debt. TPX shares surged 15% on the day; ZZ climbed just more than 2%, finishing right under the purchase price.

Finally, the National Football League came to a resolution with its closed-out referees[14], with the regular refs getting back to work starting with today’s Cleveland-Baltimore game. Office fans of both teams agree it should add legitimacy to the impending beatdown of the Browns.

Friday’s earnings notables include Walgreen (NYSE:WAG[15]), American Greetings (NYSE:AM[16]), and Finish Line (NASDAQ:FINL[17]).

Three Up

• First Solar (NASDAQ:FSLR[18]): Up 11% ($2.30) to $23.20.
• Kayak (NASDAQ:KYAK[19]): Up 9.15% ($2.99) to $25.67.
• Ciena (NASDAQ:CIEN[20]): Up 7% (91 cents) to $13.88.

Three Down

• RadioShack (NYSE:RSH[21]): Down 6.5% (17 cents) to $2.43.
• Annaly Capital (NYSE:NLY[22]): Down 3% (52 cents) to $16.84.
• Activision Blizzard (NASDAQ:ATVI[23]): Down 2.65% (31 cents) to $11.37.

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities.

Source URL: https://investorplace.com/2012/09/a-rally-led-by-spain-thursdays-ip-market-recap-dfs-mkc-tpx/

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