It was an up and down day on Wall Street as weak economic data and concerns about the Fed weighed on investors. All three major indexes fell between 0.6% and 0.7% for the day and logged the third weekly loss in four, shedding 1% for the week.
A surprise jump in the producer price index for May, weaker than expected industrial production, and a drop in consumer sentiment kept stocks under pressure throughout the session. Wholesale prices jumped 0.5% versus an expected rise of 0.1%. Excluding food and energy, core PPI rose 0.1%. Industrial production came in flat for the month versus an expected 0.1% rise. And the University of Michigan/Thomson Reuters consumer sentiment index for May was revised down to 82.7 from 84.5.
Concerns about the Federal Reserve also weighed on the market action ahead of a key two-day FOMC policy meeting next week, that ends with a Ben Bernanke press conference on Wednesday. A Wall Street Journal report published late on Thursday suggested the Fed will seek to soothe the markets moving forward. That was one of few catalysts this week that helped to fuel the market's only positive trading day.
Here are the day's top stock stories:
Airbus is casting a shadow over Boeing (BA). The A-350 long-distance passenger plane taking off on its maiden flight today. It's a direct competitor to Boeing's 777 and the 787 Dreamliner. If successful, the A-350 will move into a test-flying period that could last up to 18-months. Today's test flight is said to be perfectly positioned to steal the limelight ahead of the Paris Air Show on Monday. That's where Boeing hopes to prove the Dreamliner is back on track after a series of battery problems grounded the entire fleet. For those keeping score, the 787 is outpacing the A-350 on orders 890 to 613.
Not so pretty news for Revlon (REV). Shares fell almost 3% on word the SEC is fining the cosmetics company $850,000 for allegedly misleading investors, saying they "kept critical information" from its board in an attempt to go private and pay down debt back in 2009. It's a drop in the bucket for billionaire Ron Perelman, who's owned a majority stake in Revlon since taking control of it in a hostile takeover in 1985. Shares of Revlon have soared nearly 40-percent from a year ago.
Myriad Genetics (MYGN) shares got crushed 14% after the Supreme Court ruled unanimously on Thursday that human genes cannot be patented. Myriad was at the center of the case, holding patents related to the BRCA-gene, which indicate whether a woman is at high risk of developing breast or ovarian cancer. Actress Angelina Jolie recently made headlines after undergoing a double mastectomy based on Myriad's test showing she was high-risk.
Restoration Hardware (RH) soaring almost another 16% today on a blockbuster earnings report released Thursday after the bell. The home furnishings chain earned 6-cents a share versus an expected 4-cents, and upped full-year guidance. Fueling the bullish case, RH is in expansion mode, announcing plans to launch two new businesses --RH Kitchen & Tableware and RH Antiquities. They're also proving that "showrooming" can work for a bricks-and-mortar retailer. The CEO says they're in active discussions to lease thirty sites across the country, including several in the "most prestigious shopping centers in North America."
An earnings miss for Smithfield Foods (SFD) didn't hurt the stock too badly. Shares were flat on the day despite the largest U.S. pork producer falling short of profit estimates. Smithfield posted EPS of 21-cents on revenues of $3.32 billion. Consensus estimates were for EPS of 43-cents on revenues of $3.27 billion. The company decided not to hold an earnings conference call due to the pending $4.7 billion takeover deal with China's Shuanghui Group. If approved by Congress, this will be the largest Chinese takeover of an American company. The deal has helped drive up prices of lean hog futures in the commodities pits.
Smith & Wesson (SWHC) shares popped 5% after jumping the gun with a preliminary release of fourth-quarter earnings. It expects quarterly profits of 44-cents a share on revenues of $179 million. And the gun-maker is projecting record-breaking full-year results. They also announced a $100 million share buyback plan and a debt exchange. The stock has been on a tear, up 50-percent over the last one-year. President Obama's reelection and the Newtown, Connecticut school shooting in December are widely cited as sales catalysts due to rising fear over gun control. The company will report is full fiscal year and fourth-quarter earnings on June 25th.
Finally, shares of Groupon (GRPN) got a much needed 11% boost. The daily deals site was upgraded to "buy" from "hold" by analysts at Deutsche Bank. The research cited Groupon's new strategy to gain customers by pulling them in versus blasting out emails, which could potentially grow billings by more than 20-percent.
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