Central Banks Countering Headwinds

Indie Research

Stocks soared on the day after the European Central Bank unveiled a sovereign bond purchasing program to help lower borrowing costs in troubled countries such as Spain and Italy. Meanwhile, the U.S. saw some positive data on the jobs front with better-than-expected weekly claims and a stronger ADP report. The jobs report will be announced tomorrow morning, with the market expecting the U.S. to have added 130,000 jobs last month. While potential headwinds exist, right now this market is being buoyed by accommodative central banks.

The RF Semiconductor Stocks Index was the top performing tickerspy Index on the day, led by MaxLinear Inc (MXL) with a 8% gain. The Fuel Cell Stocks Index was the day's worst performing tickerspy Index, with Fuelcell Energy (FCEL) down -11%.

Stocks surged on the day, led by a 67-point, or 2.2%, increase in the Nasdaq to 3,136. The S&P soared 29 points to 1,432, while the Dow jumped 245 points to 13,292. Oil rose 17 cents to $95.53 a barrel, while gold added $11.60 to $1,705.60 an ounce.

In economic news, initial claims for jobless benefits fell by -12,000 last week to 365,000. Economists had expected 373,00 jobless claims. Elsewhere, the ADP survey of private employers showed 201,000 new jobs were added last month, topping economist expectations for 140,000 new private sector jobs. The Institute for Supply Management, meanwhile, said its service sector index climbed to 53.7 last month from 52.6 in July. Economists had expected a reading of 52.5.

In earnings news, shares of Men's Wearhouse (MW) surged 18.8% after the men's suits retailer said its fiscal second-quarter profit rose to $59.4 million, or $1.15 per share, from $57.1 million, or $1.09 per share, a year earlier. Revenue rose 1% to $662.3 million, while same-store sales rose 4.4%. Analysts had expected a profit of $1.12 per share on revenue of $662.9 million. For the current quarter, the company expects a profit of 95-98 cents a share. For the fourth quarter, Men's Wearhouse forecast a profit of 12-15 cents per share. For the full year, the company expects a profit of $2.74-$2.80. Analysts were expecting a profit of 97 cents a share in the current quarter, 9 cents in the fourth quarter, and $2.71 per share for the full year.

Shares of VeriFone Systems (PAY) plunged -13.7% after the electronic payments terminal maker reported fiscal third-quarter revenue of $489.1 million, well below the $498.0 million analysts expected. For the quarter, VeriFone earned $37.7 million, or 34 cents per share, up from $26.3 million, or 28 cents per share, a year earlier. On an adjusted basis, the company earned 75 cents. Analysts had expected a profit of 70 cents. The company forecast a fiscal fourth-quarter profit of 75-77 cents a share on revenue of $495-$500 million. Analysts were expecting EPS of 74 cents on revenue of $521 million. For the full year, VeriFone expects to earn $3.25-$3.30 a share on revenue of $2.05-$2.1 billion. Analysts were expecting a profit of $3.23 per share on revenue of $2.15 billion. Three pros counted VeriFone among their top holdings at the end of Q2 and nearly 200 tickerspy members own the stock in their portfolios.

Homebuilder Hovnanian Enterprises (HOV) posted a fiscal third-quarter profit of $34.7 million, or 25 cents per share, compared with a loss of -$50.9 million, or -47 cents per share, a year earlier. This quarter's results were bolstered by the reversal of $36.5 million in state tax reserves. Revenue surged to $387 million from $285.6 million. Analysts had expected a loss of -14 cents per share on revenue of $413.2 million. Shares of the homebuilder fell -4.4%.

OCZ Technology (OCZ) shares tumbled -18.8% after the solid-state drive maker lowered its fiscal second-quarter revenue estimate to $110-$120 million from previous guidance of $130-$140 million. In the year-earlier quarter, OCZ had revenue of $78.5 million. The company cited a NAND flash memory chip shortage for the reduced guidance. Six pros counted OCZ among their top holdings at the end of Q2 and more than 60 tickerspy members own the stock in their portfolios.

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