Hot Stock Minute

Stocks Rise on Fed Comments, Retail Sales

Stocks pared early losses and closed the day with modest gains after Atlanta Fed president Dennis Lockhart spoke out about the Fed's $85 billion monthly bond buying program. Lockhart said the economy hasn't proven stable enough for the Fed to map out a clear policy shift at the upcoming September FOMC meeting. On the economic front, the Commerce Department says retail sales rose 0.2% in July when expectations had been for a gain of 0.3%. But excluding autos, core retail sales rose 0.5% versus an estimated 0.4%. Meanwhile, import prices rose less than expected for the month, also gaining 0.2% in a report released by the Labor Department. The rise comes after four straight months of declines.

Poll Question: Does Bill Ackman's resignation help or hurt J.C. Penney?

J.C. Penney (JCP) fell over 3.5% on news that billionaire Bill Ackman has resigned from the board. Ackman released a statement this morning stating, "At this time, I believe that the addition of two new directors and my stepping down from the board is the most constructive way forward for J.C. Penney and all other parties involved." Ackman's action comes just days after he went public with his push to have CEO Mike Ullman ousted once again. Ackman's departure came with the understanding that retail veteran Ronald W. Tysoe will join the board. So will a second person who has not yet been named. Ackman is J.C. Penney's largest shareholder with an 18% stake in the company.

BlackBerry (BBRY) rose over 1% today on news that it is weighing all options for the future. The rise follows a 10.5% gain yesterday when the company announced it was considering "strategic alternatives." Perhaps the most likely outcome is a sale to a private equity firm. At this point, however, it's unclear whether the company once known as Research in Motion would be more valuable as a whole or in pieces. BlackBerry pioneered mobile email with its first smartphones and email pagers, but has steadily lost market share. It once had a market cap of $80 billion, but that has now shrunk to around $6 billion.

Orbitz (OWW) fell 13% today, less than a week after spiking 37% in one day. Shares tumbled on news that the company's largest shareholder, PAR Capital Management, has sold nearly 1/3 of its 24.6 million shares. The stock's climb last week came after the company reported strong sales for hotel bookings and vacation packages. It also coincided with Priceline's race towards $1,000 a share.

Yum Brands (YUM) fell 2% after reporting same-store sales in China plummeted 13% in July. Most of the drop came from KFC restaurants where fears of bird flu and an earlier food-safety scandal have been keeping customers away. But analysts say something else is also at work: competitors like McDonald's (MCD), Starbucks (SBUX), and Haagen-Dazs have been seizing market share by pushing cold drinks and ice cream during what has been a period of record heat.

Sina (SINA) rose 3% despite reporting a surprise quarterly loss after yesterday's closing bell. Sina said it lost 17-cents a share for the period, when analysts had expected profits of 12-cents a share. Revenue however topped expectations by more than $20-million coming in at $157-million, and excluding items, the company would have made 21-cents a share. Sina is a Chinese internet company. Its products include the Weibo mobile app which claims to have 54-million users. Even before you add in today's gains, shares are up 42% over the past month.

View Comments (24)