U.S. markets meandered around Friday, as investors took in the latest round of economic news and its effect on the Fed’s decision to raise interest rates next month. They were also watching the gyrations in the oil markets very carefully, as crude oil finished the day slightly lower at $42.14.
The biggest economic news was the U.S. Bureau of Labor Statistics reporting that the Producer Price Index was up 0.2% in July, as was the core PPI. Both were ahead of the Street’s estimates of 0.1%. However, the PPI was up 0.4% in June, so this month was actually a decline.
In addition, U.S. industrial production was 0.6% higher in July, and was above the 0.3% number the Street was expecting, as auto production increased measurably.
Closing out the trading day, breaking news from the European commission confirmed the eurozone’s bailout of Greece. The bailout means the eurozone could lend Greece up to 86 billion euros over the next three years. It was enough to keep the markets in positive territory at day’s end.
The Dow Jones Industrial Average and S&P 500 rose 0.4%. The Nasdaq Composite was 0.3% higher. Almost every sector was showing green today, with utilities and financials one and two in relative strength.
It was also a good day for retailers, such as J C Penney Company Inc (NYSE:JCP) and Nordstrom, Inc. (NYSE:JWN), and Darling Ingredients Inc (NYSE:DAR) had big news of its own.
Here are the details:
J C Penney Company Inc (JCP)
It wasn’t very long ago that JCP was left for dead by the Street. At the time, JCP was a desultory company with an embattled $5 stock and a prayer. On Friday, JCP stock’s prayers were answered.
JCP rose over 5% today, after its report of an adjusted loss per share of 41 cents bested the Street view for a 50 cent per share loss. Not exactly “prayer-answered” numbers, but good enough to put some color back into JCP stock as it represents recent company improvements. Improvements such as a 4.1% increase in same-store sales, ahead of estimates for 3.9%.
CEO Marvin Ellison, JCP’s latest CEO, said,
“Although we have significant work to do as a company to regain our status as a world-class retailer, I am pleased with the resilience and the efforts of our associates.”
JCP closed at $8.52 Friday, and has been slowly but steadily rising in price throughout 2015.
Nordstrom, Inc. (JWN)
JWN stock gained 4% after reporting second-quarter earnings late Thursday of 93 cents a share, down slightly from last year, but 3 cents ahead of analysts’ estimates.
Revenue of $3.7 billion was up 9.1% year-over-year and was ahead of Street estimates for $3.67 billion. Nordstrom’s purchase of The Trunk Club and the launching of Nordstromrack.com was a big part of the company’s sales growth.
In addition, the fashion retailer improved its guidance for fiscal 2015, from the previous $3.65 to $3.80, to $3.85 to $3.95. JWN said it will continue to open three new stores and 16 Nordstrom Rack stores during its Q3 FY2015.
Darling Ingredients Inc (DAR)
DAR was a surprisingly big winner today, up more than 13% despite an earnings report that did not meet expectations. The producer of sustainable natural ingredients reported second-quarter adjusted earnings of 13 cents per diluted share on revenue of $859.3 million, beating analysts’ estimates for 7 cents a share, but missing the revenue consensus of $891.77 million.
But the Street liked that DAR’s board of directors has authorized a share buyback program over the next two years, which can go as high as $100 million, if market conditions are deemed favorable.
DAR began 2015 trading over $21 a share, but DAR stock has since fallen and was recently near $12 a share. Perhaps Friday’s action is indicative of better times ahead.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
