Fed Could Be Spurred to Act

Indie Research

Stocks took a hit after Federal Reserve Bank of St. Louis President James Bullard called yesterday's release of the FOMC minutes "a bit stale," and said he didn't support additional monetary easing. Jobless claims, though, hit a one-month high, which could spur the Fed to act before it gets too close to November's elections. Meanwhile, the housing market continues to show signs of recovery, which is a nice positive.

The Pharmacy Benefit Manager Stocks Index was the top performing tickerspy Index on the day, led by Catamaran (CTRX) with a 4% gain. The Discount Retailer Stocks Index was the day's worst performing tickerspy Index, with Big Lots (BIG) down -21%.

Stocks fell on the day, led by a -115 point, or -0.9%, decline in the Dow to 13,057. The S&P dipped -11 points to 1,402, while the Nasdaq tumbled -20 points to 3,053. Oil fell -99 cents, to $96.27 a barrel, while gold climbed $32.30 to $1,672.80 an ounce.

In economic news, initial claims for jobless benefits rose by 4,000 last week to 372,000. Economists had expected a reading of 365,000. The four-week moving average rose to 368,000. New home sales, meanwhile, increased 3.6% in July to a seasonally adjusted annual rate of 372,000.

In earnings news, shares of Hewlett-Packard (HPQ) slid -8.1% after the Dow component lowered its full-year EPS guidance to $4.05-$4.07 a share from $4.05-$4.10. HP posted a fiscal third-quarter loss of -$8.9 billion, or -$4.49 a share, compared with a profit of $1.9 billion, or 93 cents a share, a year earlier. On an adjusted basis, HP earned $1.00 a share on revenue of $29.7 billion. Analysts had expected a profit of 98 cents on revenue of $30.1 billion.

Shares of discount retailer Big Lots plunged -20.9% after the company lowered its full-year guidance to $2.80-$2.95 a share from $3.25-$3.40 a share. Analysts were expecting EPS of $3.29. Big Lots' second-quarter profit from continuing operations fell to $22.1 million, or 36 cents per share, from $35.7 million, or 50 cents per share, a year earlier. Revenue increased 4% to $1.22 billion. Analysts had expected a profit of 41 cents per share on revenue of $1.24 billion. Twelve pros counted Big Lots among their top holdings at the end of Q2 and nearly 160 tickerspy members own the stock in their portfolios.

Guess (GES) shares tumbled -22.7% after the apparel retailer lowered its full-year revenue guidance to $2.62-$2.65 billion from $2.70-$2.74 billion. Guess also pared its EPS guidance to $2.15-$2.30 a share from $2.50-$2.65 a share. Analysts were expecting a profit of $2.64 per share and sales of $2.7 billion. In its fiscal second quarter, Guess earned 49 cents a share on revenue of $635.4 million. Analysts had expected a profit of 51 cents on sales of $629.9 million. Three pros counted Guess among their top holdings at the end of Q2 and 120 tickerspy members own the stock in their portfolios.

Shares of Krispy Kreme Doughnuts (KKD) jumped 5.3% after the company posted a fiscal second-quarter profit of $4.9 million, or 7 cents per share, down from $8.8 million, or 12 cents per share, a year earlier. On an adjusted basis, the company earned 12 cents per share. Revenue rose to $102.1 million from $98 million. Analysts had expected a profit of 6 cents per share on $104.6 million in revenue. The company expects a full-year profit of 36-42 cents, above the 32-cent consensus.

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