Wall Street began the morning on a high note, but then ran out of gas as the trading day moved along. The initial catalyst was a bounce back in the Chinese stock market, as the Shanghai Composite gained almost 6% overnight after new restrictions on short selling went into effect and the country relaxed margin requirements.
In economic news, the Labor Department reported that weekly jobless claims were up to 297,000, a five month high, for the week ending July 4th. Initial unemployment benefit claims rose 15,000 from a revised 282,000 in the previous week. Wall Street economists were expecting only 275,000.
The Dow Jones Industrial Average was up 0.2%, and a slightly stronger S&P 500 and Nasdaq were both up between 0.2% and 0.3%.
Most sectors were higher today, with strength noted in energy and financial stocks. Retailers were also strong, which is why Kate Spade & Co (KATE) and Vipshop Holdings Ltd – ADR (VIPS), along with Clean Energy Fuels Corp (CLNE) were three of the best performers in the stock market today.
Kate Spade (KATE)
KATE stock zoomed 11% higher this morning, along with other clothing retailers such as L Brands Inc (LB) and Zumiez Inc. (ZUMZ), after a rise in June retail sales at several established stores was reported.
This is a real positive for KATE, as June is not typically a strong month for retail sales, because parents often wait for August to purchase back to school clothing. The real catalyst however, was a glowing analyst report: Cleveland Research Co. rated KATE stock a “buy,” touting its growth potential that the company’s distribution channels afford it going forward.
KATE stock has recently fallen from $35 to $20, so hopefully today’s big day will be an inflection point for the company.
Vipshop (VIPS)
VIPS stock gained 12% after Stifel analyst George Askew named VIPS, along with several other Chinese stocks as being great opportunities for appreciation at current levels. He noted that VIPS could actually benefit from a slower Chinese economy because they are a leading retailer of discounted apparel in China.
VIPS stock has fallen from $30 to less than $23 since April. It seems to have been caught up in the general crash of the Chinese market, rather than its fundamentals changed. However, keep in mind there is a pending class action lawsuit by Levi & Korsinsky, LLP against VIPS, which alleges that Vipshop Holdings has manipulated and overstated its sales, profits, cash flow, etc.
One never knows whether lawsuits like these have merit or are entirely frivolous, but investors should at least be aware of pending litigation against their holdings, and that’s no different with VIPS stock.
Clean Energy Fuels (CLNE)
CLNE stock was a big winner today for the second time this week, after delivering a press release about its new and expanded refuse stations. CLNE has built 14 new stations in 2015 and says it expects to build 22 more by the end of the year. CLNE stock surged over 13%.
CLNE’s Redeem product is derived from methane gas in landfills and farms, and then converted into natural gas. CLNE stock has been severely trounced over the past two months, falling about 50% as bears built very high short positions. Point being, some of the bears may have been going into hibernation today, buying CLNE to close out their short positions.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
