With oil prices hitting their highest levels of 2016, stocks rallied for a second day as the S&P 500 and the Nasdaq Composite each added 0.7%. The Dow Jones Industrial Average posted a triple-digit gain, adding 0.82%.
Financial services, the second-largest sector weight in the S&P 500, were leaders again Wednesday as investors continue betting the Federal Reserve will boost interest rates in June.
In what was another impressive day for U.S. equities, Computer Sciences Corporation (NYSE:CSC), DSW Inc. (NYSE:DSW) and Jack in the Box Inc. (NASDAQ:JACK) were among the stars of the day.
Computer Sciences Corporation (CSC)
Shares of information technology provider Computer Sciences surged 42.1% on volume that was more than 15 times the daily average following news the company will merge with the spun-off IT services section of Hewlett Packard Enterprise Co (NYSE:HPE). Shares of HPE also rallied on the news, jumping 6.8% on more than five times the usual turnover.
CSC CEO Mike Lawrie will become chairman, president and CEO of the combined CSC/HPE with HPE investors owning half of the new company, according to Reuters. The deal is expected to close by the first quarter of 2017.
DSW Inc. (DSW)
Footwear retailer DSW soared 6.7% on more than triple its usual volume a day after the stock was punished following a slack earnings report. Yesterday, DSW posted quarterly EPS of 40 cents on sales of $681.3 million. Analysts expected DSW to earn 45 cents a share on sales of $698.8 million.
DSW forecast full year earnings of $1.32 to $1.42 a share, well below previous guidance issued by DSW of $1.54 to $1.64 per share.
Canaccord Genuity issued a “hold” rating on DSW today while lowering its price target on the stock to $19 from $20.
Jack in the Box Inc. (JACK)
Fast-food-chain operator Jack in the Box added almost 5.3% on more than double the usual volume following the company’s analyst day at which JACK said it would send more locations into the hands of franchisees and reduce costs in the coming years.
JACK could aim to increase its mix of franchisee-owned stores to 90% to 95% in the years ahead, which could boost per-share earnings by the mid-teens on a percentage basis.
JACK said it sees capital expenditures rising in 2016 and 2017 “but topping out at $135 million to $140 million from 2018-2020,” reports Investor’s Business Daily.
At the time of this writing, Todd Shriber did not own any of the aforementioned securities.
