After a solid start, stocks reversed course and fell on the day. A couple of bearish Wall Street notes didn't help. Nomura strategist Bob Janjuah called for the S&P to fall between -20% to -25% over the next three months, hurt by a strong dollar and central banks disappointing the market. Goldman Sachs chief U.S. equity strategist David Kostin, meanwhile, came out calling for a -12% decline in equities because he believes Congress will fail to address the fiscal cliff before the election, and perhaps even after the election. We agree that the fiscal cliff is an issue, and we also highly doubt the issue will be addressed before the election. We've been taking some money off the table into the rally, but we think a -20% to -25% drop looks a bit extreme. A pullback may be in the offing, but it may not come until stocks run further from here.
The Chinese Travel Stocks Index was the top performing tickerspy Index on the day, led by eLong (LONG) with a 11% gain. The Chinese Advertising Stocks Index was the day's worst performing tickerspy Index, with AirMedia Group (AMCN) down -17%.
Stocks fell on the day, led by a -68 point, or -0.5%, decline in the Dow to 13,204. The S&P fell -5 points to 1,413, while the Nasdaq dropped -9 points to 3,067. Oil rose 71 cents to $96.68 a barrel, while gold jumped $19.90 to $1,642.90 an ounce.
In earnings news, medical device maker Medtronic (MDT) said its second-quarter profit rose to $864 million, or 83 cents per share, from $821 million, or 77 cents per share, a year earlier. On an adjusted basis, Medtronic earned 85 cents per share. Revenue increased to $4.01 billion from $3.95 billion. Analysts had expected a profit of 85 cents on $4.0 billion in revenue. The company reiterated full-year EPS guidance of $3.62-$3.70. Analysts were expecting EPS of $3.65. Shares of Medtronic fell -0.7%. Fifty pros held Medtronic in their portfolios at the end of Q2 and more than 500 tickerspy members own the stock in their portfolios.
Shares of apparel retailer Urban Outfitters (URBN) surged 18.3% after the company said its fiscal second-quarter profit climbed to $61.3 million, or 42 cents per share, from $56.7 million, or 35 per share, a year earlier. Revenue jumped 11% to $676.3 million, while same-store sales increased 4%. Analysts had expected a profit of 33 cents per share on revenue of $672 million. Two pros counted Urban Outfitters among their top holdings at the end of Q2 and more than 100 tickerspy members own the stock in their portfolios.
Daktronics (DAKT) shares soared 17.0% after the electronic scoreboard and billboard maker said its fiscal first-quarter profit rose to $6.7 million, or 16 cents per share, from $3.4 million, or 8 cents per share, a year earlier. Revenue jumped to $132.9 million from $118.7 million. Analysts had expected a profit of 4 cents a share on revenue of $120.4 million.
Shares of Facebook (FB) slid -4.3% after it was revealed that director and early backer Peter Thiel sold most of his stake in the social networking company after a recent lockup period on insider sales expired. Thiel sold about 20.1 million shares on August 16th and 17th at prices between $19.27 to $20.69 a share. Including sales of Facebook shares following the company's IPO, he has sold nearly $1 billion worth of Facebook stock.
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Happy demi-anniversary, stock market rally. Will the honeymoon ever end?