Fed Stimulus Hopes Intoxicating
Stocks continued to rally on the hopes of more Fed stimulus, as the lure of cheap money continues to intoxicate investors. The move came despite more worrisome signs from Europe, including a jump in Spanish bond yields and a sharp decline in German consumer confidence. The FOMC is set to announce its rate decision tomorrow, so we'll see if the market gets anything it's looking for. Expect tomorrow to potentially be a volatile day.
The Cement Stocks Index was the top performing tickerspy Index on the day, led by CEMEX (CX) with a 6% gain. The Fuel Cell Stocks Index was the day's worst performing tickerspy Index, with Hydrogenics (HYGS) down -2%.
Stocks rose on the day, with the Dow climbing 96 points to 12,837. The S&P added 13 points to 1,358 while the Nasdaq jumped 34 points to 2,930. Oil rose 76 cents to $84.03 a barrel, while gold fell -$3.80 to $1,623.20 an ounce.
In economic news, the Commerce Department said housing starts fell -4.8% to a seasonally adjusted annual rate of 708,000. The April number was revised higher to a seasonally adjusted annual rate of 744,000. Permits, though, rose 7.9% month over month to a seasonally adjusted rate of 780,000, and were up 25% year over year.
In earnings news, enterprise software maker Oracle (ORCL) released its fiscal fourth-quarter results several days ahead of schedule, saying it earned $3.45 billion, or 69 cents per share, compared with $3.2 billion, or 62 cents per share, a year earlier. On an adjusted basis, California-based Oracle earned 82 cents on revenue of $10.9 billion. Analysts had expected a profit of 78 cents a share on revenue slightly below $10.9 billion. The company also said it will buyback $10 billion in stock. Shares of Oracle rose 3.1%. Nearly 215 pros held Oracle in their portfolios at the end of Q1 and nearly 1,480 tickerspy members own the stock in their portfolios.
Book retailer Barnes & Noble (BKS) said its fiscal fourth-quarter loss narrowed to -$57.6 million, or -$1.08 per share, from -$59.4 million, or -$1.04 per share, a year earlier. Sales were flat at $1.38 billion. Analysts had expected a loss of -92 cents a share on sales of $1.48 billion. Shares of Barnes & Noble fell -4.0%.
Shares of drugstore operator Walgreen (WAG) dropped -5.9% after the company said it will pay $6.7 billion for a 45% interest in European health and beauty firm Alliance Boots Holdings. Walgreen will pay $4 billion in cash and the rest in shares for the stake in Alliance Boots. The move will create the world's biggest buyer of prescription drugs. Walgreen will also have the option to purchase the rest of Alliance in three years.
Shares of J.C. Penney (JCP) plunged -8.6% a day after the Texas-based retailer announced the departure of Michael Francis who had been serving as the company's president. A statement issued by J.C. Penney after the close of U.S. markets on Monday gave no reason for the departure. Francis was a high-profile hirer from rival Target (TGT) who was responsible for the marketing of its new pricing plan that eliminated many of its sales events. Twelve pros counted J.C. Penney among their top holdings at the end of Q1 and nearly 260 tickerspy members own the stock in their portfolios.
Fun and informative, tickerspy.com is a free investing website where you can track multiple stock portfolios and compare against 250 proprietary Indexes tracking themes from dividends to ETFs to green energy to precious metals. Best of all, tickerspy.com lets you spy on the portfolios of nearly 3,000 Wall Street institutions and hedge funds and see graphs of their performance. Try tickerspy.com today and find out how you stack up against investing legends like Warren Buffett!
