U.S. stocks were modestly higher today after yesterday’s strong showing, despite weakness in the Dow Transports and some weaker economic reports.
The Dow Transports were down about 1.8% in mid afternoon, holding the major averages back somewhat.
September industrial production was down 0.2%, which was expected, but it was the 7th time in 9 months that the number was negative. Capacity utilization at 77.5%, was slightly higher than expectations, but below August’s 77.8% number.
The Dow Jones Industrial Average and S&P 500 both finished up roughly 0.5%. The Nasdaq was higher, but only by 0.3%. Sectors were mostly higher, with consumer stocks, healthcare, and financials outperforming the rest.
One of the stocks largely supporting the Dow was General Electric Company (NYSE:GE), which along with Mattel, Inc. (NASDAQ:MAT), and Yum! Brands, Inc. (NYSE: YUM) are 3 of Today’s Best Stocks. Here’s the full story:
General Electric Company (GE)
GE stock pushed over 3% higher today after reporting third quarter adjusted earnings of 29 cents a share, ahead of street forecasts for 26 cents a share. In addition, revenue of $31.68 billion was ahead of the forecast for $28.67 billion.
Although the oil and gas components of GE did poorly due to declining prices, other divisions, such as the aviation and transportation units were up nicely.
GE stock had traded sideways for months before breaking out on strong volume above resistance at $27 over the last two weeks.
Mattel, Inc. (MAT)
MAT stock was toying with the competition today after Oppenheimer maintained an “outperform” rating on the company, along with a $27 price target.
On Thursday, MAT reported third quarter earnings of 71 cents a share on revenue of $1.79 billion, and both were below the Street’s expectations. But Oppenheimer said the decline in sales was largely due to foreign exchange rates and a sales shift from Q3 to Q4. Oppenheimer also likes the company’s confidence, as shown by the current dividend, which is over 6%.
MAT stock has been trading below its 200-day moving average for several months, but the strong activity today had the top of the trading range nearly touching the 200-day moving average. That could be a good omen going forward.
MAT stock was up 6%, and led the Nasdaq in volume with over 14 million shares traded.
Yum! Brands, Inc. (YUM)
YUM stock was up 4% after the company updated its guidance for the full year and named an activist investor to its board of directors.
The casual fast food company, which includes KFC, Taco Bell and Pizza Hut, said growth this year should range from flat to low single digit positive percentages for the full year. They said that sales in China are difficult to forecast with the volatility that is occurring there.
Keith A. Meister, the Founder and Managing Partner at Corvex Management was named to the board. Mr. Meister is an activist investor whose firm owns almost 5% of the company, triggering speculation that an internal shake up could be forthcoming.
YUM stock had recently been pelted down from over $82 to $68 in one day, after missing analysts’ estimates on their third quarter earnings and badly missing China same-store sales numbers.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
