U.S. markets closed much lower today, led by International Business Machines Corp. (NYSE:IBM) and United Technologies Corporation (NYSE:UTX), each of which plunged 5.8% and 7%, respectively, after missing estimates on revenues. Those revenue misses kept beats on earnings from sending stocks higher today.
The Dow Jones Industrial Average sank 1% today, while the S&P 500 was only down 0.4% and the Nasdaq missed by 0.2%. Among the sectors, almost all were touching red, but some commodities were a bit stronger today.
Not all the news was bad. Harley-Davidson Inc (NYSE: HOG), Newmont Mining Corp (NYSE: NEM) and Ceasars Entertainment Corp (NASDAQ:CZR) are three of today’s best stocks, performing well despite the Dow’s poor showing.
Harley-Davidson Inc (HOG)
It’s tough to ride a motorcycle into headwinds, and it’s also tough to beat Wall Street analysts’ expectations when your product is being sold overseas in a strong U.S. dollar environment.
Nevertheless, that’s what Harley-Davidson did, as the giant motorcycle manufacturer reported second-quarter earnings of $1.44 a share, down 15% from a year ago, but ahead of Wall Street’s projection for HOG of $1.39 a share.
Revenue fell year-over-year from $2 billion to $1.82 billion, but also beat the Street’s view of $1.67 billion.
Not only did HOG have head winds from the U.S. dollar to overcome, but rival motorcycle manufacturers have been trying to compete with HOG by discounting prices. However, CEO John Olin made it clear today that his company had no intention of doing that, saying, “We will not meet discounting with discounting. We will not be putting tags on our motorcycles.”
Harley-Davidson stock rose nearly 5% on strong volume of 6.18 million shares.
Newmont Mining Corp (NEM)
NEM stock was golden today, as gold stocks in general staged a rebound from some overdone selling as of late. Newmont was up 3%, as they prepare to report Q2 results on Wednesday before the bell.
Investors may be looking at past results, as NEM has had upside earnings surprises in the last three quarters. The biggest risk to earnings this time will be that the realized price of gold will have dropped significantly from the second quarter of last year.
Part of the reason for NEM stock’s price decline was their acquisition of the Cripple Creek & Victor mine in Colorado from Anglo Gold Ashanti Limited (ADR) (NYSE:AU) about seven weeks ago.
Ceasars Entertainment Corp (CZR)
Ceasar stockholders were rolling lucky 7’s today as CZR stock stormed up 23% after CZR announced they had a preliminary agreement established with second-lien note holders of Ceasers Entertainment Operating Co. in a new restructuring plan.
CEOC is presently in bankruptcy proceedings — with about $20 billion in debt — so Ceasars is doing everything it can to save its affiliate company from going under.
The second-lien note holders are a group that includes some very large companies, such as Paulson & Company and Soros Fund Management LLC. The group has been very critical of the bankruptcy plans, and Ceasars needs their blessing of the restructuring before they can hope to have the deal approved in bankruptcy court.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
