Mixed Messages on Fiscal Cliff

Indie Research

While it was a bit of a seesaw session, stocks stayed mostly positive throughout the day despite mixed messages on the fiscal cliff. We still think a deal gets done, but it likely won't be until much closer to the New Year. Thus, for much of the next month, investors are going to have to watch political wrangling influence the market.

The Ophthalmology and Eye Care Stocks Index was the top performing tickerspy Index on the day, led by Alimera Sciences (ALIM) with a 8% gain. The Department Store Stocks Index was the day's worst performing tickerspy Index, with Kohl's (KSS) down -12%.

Stocks rose on the day, with the Dow up 37 points to 13,022. The S&P climbed 6 points to 1,416, while the Nasdaq jumped 20 points to 3,012. Oil advanced $1.58 to $88.07 a barrel, while gold rose $10.70 to $1,727.20 an ounce.

In economic news, the Commerce Department said U.S. third-quarter GDP jumped 2.7%, well above the 2.0% estimate released last month. Economists had expected a reading that showed 2.8% growth. Meanwhile, initial claims for jobless benefits fell by -23,000 to 393,000 last week, coming in just below the 395,000 estimate. Elsewhere, the National Association of Realtors said its index of pending home sales rose to 104.8 in October from 99.6 in September as contracts to buy previously owned homes climbed 5.2% last month. Index readings above 100 are considered healthy. Economists were only expecting a 1.0% increase.

In earnings news, apparel maker Guess (GES) reported a fiscal third-quarter profit of $36.6 million, or 43 cents per share, compared with $66.3 million, or 71 cents per share, a year earlier. Revenue fell -2% to $628.8 million. Analysts had expected a profit of 44 cents per share on revenue of $624.8 million. The company forecast fourth-quarter EPS of 85-95 cents on sales of $780-$800 million. Analysts were expecting 95 cents per share on revenue of $789 million. Guess expects a full-year profit of $2.05-$2.15 a share on revenue of $2.62-$2.64 billion. Analysts were expecting a profit of $2.17 per share on revenue of $2.63 billion. The company also announced a $1.20 special dividend. Shares of Guess rose 1.9%.

Shares of book retailer Barnes & Noble (BKS) plunged -11.1% after the company said revenue from digital content rose 38% in the fiscal second-quarter compared with growth of 46% in the previous quarter. The company had net income of $4.4 million in the quarter, or a loss of -4 cents a share after preferred dividends. That compares with a year-earlier loss of -$6.6 million, or -17 cents per share. Revenue was flat at $1.88 billion. Same-store sales rose 1.8%. Analysts had expected a loss of -4 cents a share on revenue of $1.91 billion.

Kroger (KR) shares surged 4.8% after the grocery store operator raised its full-year EPS guidance to $2.44-$2.46 from $2.35-$2.42. Kroger said its third-quarter profit climbed to $316.5 million, or 60 cents per share, from $195.9 million, or 33 cents per share, a year earlier. On an adjusted basis, the company earned 46 cents. Revenue rose 6% to $21.81 billion. Analysts had expected a profit of 43 cents per share on revenue of $21.55 billion. Seventeen pros held Kroger in their portfolios at the end of Q3 and more than 200 tickerspy members own the stock in their portfolios.

Shares of discount retailer Kohl's slid -12.0% after the company said November same-store sales fell -5.6%. Analysts had expected a 1.9% increase. Fifteen pros counted Kohl's among their top holdings at the end of Q3 and 200 tickerspy members own the stock in their portfolios.

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