Mixed Messages Spook Investors — Wednesday’s IP Market Recap

by Marc Bastow | May 22, 2013 5:05 pm

[1]Federal Reserve Chairman Ben Bernanke’s soothing words[2] this morning were all investors needed to send stocks higher … that is, until the Fed’s minutes revealed “a few members” didn’t see eye-to-eye with Ben and were concerned about investors’ long-term expectations.

The markets turned tail. By day’s end, the Nasdaq saw the worst of it, losing 1.11% to close at 3463.30, while the S&P 500 fell 0.83% to 1655.35. The Dow Jones Industrial Average lost 0.52% to end at 15307.17.

In corporate news, retailer Saks (SKS[3]) soared more than 13% on a report in the New York Post that it may be looking for a buyer and has hired Goldman Sachs (GS[4]) to review its options.

On the earnings front, Lowe’s (LOW[5]) rose more than 1% amid an increase in quarterly sales and profit, though it did miss top- and bottom-line estimates. Competitor Home Depot (HD[6]) also was headed higher a day after its own report of growth and optimistic 2013 guidance.

Homebuilder Toll Brothers (TOL[7]) saw shares rise more than 2% on strong first-quarter results, as well as a report from the National Association of Home Builders that existing home sales ticked upward by 0.6% in April.

Target (TGT[8]) shares dropped more than 4% after reporting a year-over-year decline in first-quarter profits. Adjusted earnings were down 5% over the period, and the retailer also lowered guidance for the remainder of the year.

Staples (SPLS[9]) also missed the mark, reporting a 9% decline in first-quarter profit because of store closings, causing shares to sell off about 2%. The office retailer’s bright spot[10] was an increase in online sales, which rose 5% to $10.6 billion in the quarter.

Solar stocks returned to earth a day after promising reports from Yingli Green Energy (YGE[11]) and JA Solar (JASO[12]), as well as reported solar trade talks between China, the U.S. and eurozone countries. YGE fell nearly 15%, and Trina Solar (TSL[13], -14.9%), JA Solar (-13.8%) and JinkoSolar (JKS[14], -9.4%) were among other hard-hit stocks in the sector.

Finally, shares of Hewlett-Packard (HPQ[15]) were up more than 11% in after-hours trading after releasing second-quarter earnings of 87 cents per share, which was 6 cents better than the Street’s expectations.

Earnings notables for Thursday include Sears (SHLD[16]), Gap (GPS[17]), Dollar Tree (DLTR[18]) and Salesforce.com (CRM[19]).

Three Up

• Zale (ZLC[20]): Up 22.2% ($1.20) to $6.60.
• Booz Allen Hamilton (BAH[21]): Up 8.3% ($1.41) to $18.38.
• Bristol-Myers Squibb (BMY[22]): Up 5.3% ($2.34) to $46.40.

Three Down

• Whiting USA Trust I (WHX[23]): Down 15.5% (86 cents) to $4.90.
• Dryships (DRYS[24]): Down 7.1% (16 cents) to $2.09.
• Nii Holdings (NIHD[25]): Down 5.5% (47 cents) to $8.02.

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/2013/05/wednesdays-ip-market-recap-sks-gs-low-hd-tol-tgt/

---