U.S. markets held onto slight gains on the last trading day of the week prior to Good Friday. Some good economic data and geopolitical news kept investors optimistic until the closing bell.
Iran was reportedly nearing some agreements with the U.S. and other nations on key points to their nuclear program. Oil had been down quite a bit earlier, but was rallying thereafter, and the dollar was weaker.
The Dow Jones Industrial Average finished 0.37% higher, the S&P 500 was about the same, and the Nasdaq was up 0.14%. Most sectors were in the green, with Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), CarMax, Inc (KMX) and Reynolds American, Inc. (RAI) finishing among the day’s best stocks.
Rite Aid Corporation (RAD) also had a good day, though it finished much weaker than what its midday performance would’ve indicated.
Petroleo Brasileiro Petrobras SA (ADR) (PBR)
PBR stock rallied more than 6% after the Brazilian stock exchange, BM&FBovespa, set new rules that are designed to improve corporate governance of its 30 publicly traded, state-run firms. These companies comprise about a quarter of the average daily trading volume on the Brazil exchange.
Petrobras has been the subject of a corruption scandal, with alleged bribery and money laundering allegedly taking place. The proposed new rules would hopefully create more transparency and tighter internal controls over the way these companies do business.
Although investors don’t usually appreciate greater regulations on companies, they applauded the new rules as it should create more trust in PBR going forward.
PBR also announced this week that is has secured a deal with China Development Bank for $3.5 billion worth of funding.
CarMax, Inc (KMX)
CarMax stock was driven to an all-time high today and finished more than 9% higher after reporting fourth-quarter earnings that rose 44.3% to 69 cents per share on revenues that climbed 14% to $3.51 billion. KMX profits trounced Wall Street estimates for 60 cents per share, and just edged out expectations for $3.5 billion in revenue.
The largest seller of used cars in the U.S., Carmax has recently benefited from consumers who delayed car purchases finally feeling financially comfortable enough to take the plunge. Used car and wholesale car sales were higher, while new car sales decreased.
Before today’s surge, KMX stock had been trading sideways since December.
Reynolds American, Inc. (RAI)
RAI stock jumped 4% on heightened expectations that their $27.4 billion merger with Lorillard Inc. (NYSE:LO) will be approved by U.S. antitrust authorities.
Executives from both companies have recently been holding talks with officials from the Federal Trade Commission (FTC), in an attempt to allay concerns that a merger between the two companies would raise anti-trust issues.
Earlier this week, the New York Post reported unnamed sources as saying the FTC was recommending a lawsuit to bar the two companies from merging. It is expected that a vote by the FTC will occur shortly after the talks are concluded.
Rite Aid Corporation (RAD)
RAD stock was trending up over 2% today after reporting same-store sales that were up 4.3% in March compared with the same month a year ago. Drugstore sales increased 4.1% to $2.026 billion, slightly above the $1.947 billion from March, 2014.
Rite Aid has recently been rumored as a possible takeover candidate by Walgreens Boots Alliance (NASDAQ:WBA), and today’s announcement was likely to fuel further speculation of a possible deal. The stock was more than 5% higher earlier in the day, but gave back more than half of that later on.
RAD is scheduled to report fourth-quarter earnings on April 8, with WAG reporting the following day. Next week could be quite interesting for both RAD and WAG stock.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
