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New Data on Incomes, Spending, Jobless Claims; IPO Problems; Dish’s Empty Plate

Dan Berman
Hot Stock Minute
New Data on Incomes, Spending, Jobless Claims; IPO Problems; Dish’s Empty Plate

We've had a trifecta of economic numbers released this morning. First, the Commerce Department says personal incomes which were up .5% for May when expectations were for .2%. The same report says consumer spending increased .3% for the month, matching estimates. Separately, the Labor Department says there were 346,000 new weekly jobless claims last week, just about in line with estimates which were for 345,000.

The cooling stock market is putting more of a chill on IPOs. HD Supply has now priced shares for an offering today at $18 according to the New York Times. The original range for the company, a Home Depot (HD) spinoff, was $22 to $25. Meanwhile, the Times says Tremor Video has priced its offering at $10 a share, below an anticipated range of $11 to $13. Separately, CDW has lowered its range, $3 to $5 down to somewhere between $17 and $18 each. And while these companies move forward with their IPOs, others including Smashburger have decided within the past week to shelve their plans for offerings until the market stabilizes.

Dish Network (DISH) begins the day with an empty plate. Founder Charlie Ergen withdrew yesterday from a bidding war with Sprint (S) to buy Clearwire (CLWR). It's the second defeat for Dish in under a week involving Sprint. Last Friday, Ergen also retreated from a battle to buy the nation's number three cell company when Japan's Softbank upped the stakes. By the way it was also last Friday that Dish hit a new 52-week high. The stock is up 47% over the past year.

Free at last. The American executive held hostage by his own workers in China is now on his way back to the U.S. Chip Starnes was released overnight, six days after being taken captive at a factory in Beijing. Starnes is the co-owner of Florida-based "Specialty Medical Supplies." He was set free after striking a deal with his underlings. The exact nature of the dispute remains unclear but it appears to have stemmed from severance packages and back pay.


Food conglomerate ConAgra (CAG) reported earnings within the past hour and is now trading 2% higher. Estimates were close on this one with the reporting adjusted earnings of 60-cents a share, a penny above consensus. The company did miss slightly on revenue of about $4.6 billion. A year ago the company reported losses of 21-cents for the quarter. The beat this time stems largely from higher sales tied to the acquisition of Ralcorp. Prior to this morning, ConAgra shares have been up 11-percent year-to-date. Back in April they hit their highest price since 1997.

Next up KB Home (KBH) which is also set to release its earnings this morning. KB is expected to post losses of 7-cents a share, a marked improvement from the minus 31-cents it reported a year ago. Revenue likely climbed almost 50%. The stock is up 2% in early trading, on top of a 2% climb yesterday. Earlier this week Sterne Agee reiterated a hold on the stock. Shares of KB are up 22% this year, despite a bit of a pullback in recent months. The stock is up more than 130% since this time last year.

Nike (NKE) reports after the closing bell. This is a stock that continues to keep a pace ahead of the market, up 19% year-to-date. Analysts are expecting the company report it made 74-cents a share up from 59-cents a year ago, though revenue likely made less of a leap. Deutsche Bank has just initiated coverage of Nike with a buy saying the company is benefitting from gains in market share and improvement in profit margins.

Finally, there's Progress Software (PRGS) which has been up nearly 10% in early trading here on the NASDAQ. The jump came after the company released quarterly results last night. Progress earlier beat expectations posting earnings of 27-cents a share when estimates were 22-cents it also beat on revenue with $82 dollars and announced a share buyback program. The stock has spent 2013 about a $4 range. It set a 52-week high of $24.50 back in January.