Retail sales for the month of January came in much lower than expected, down 0.4%, compared to the drop of 0.1% economists predicted. Initial jobless claims rose more than expected, up 8,000 to 339,000. That was well above the 330,000 economists expected. The double whammy of disappointing data sent stocks lower in early trading.
One stock that was trading sharply higher was Time Warner Cable (TWC) after Comcast (CMCSA) agreed to buy the company for $45 billion in an all stock deal that will combine the country's two largest cable companies. Time Warner Cable shareholders will receive about $159 a share. That's about $23 dollars above where shares had been trading. Time Warner Cable shares were sharply higher in the pre-market. Comcast shares were slightly lower, but Charter Communications (CHTR) was the big loser. Charter and its largest shareholder, Liberty Media (LMCA), were long-time suitors of Time Warner Cable and they apparently have finally lost out on their bid to buy Time Warner Cable. Charter shares were punished in pre-market trading. Regulators will have to approve the deal.
Cisco Systems (CSCO) reported better-than-expected earnings after the close yesterday. The networking giant beat estimates by a penny. Revenue fell 8% but also beat estimates. Cisco projected a 6 to 8% slide in revenue for the current quarter due to slowing demand in emerging markets.
Whole Foods (WFM) reported earnings before the open that missed Wall Street estimates by $0.02 a share. Revenue rose 10% but missed estimates as well. Whole Foods also lowered its full year earnings projections for the second time in months. The company blames growing competition from mainstream players like Kroger who are increasing their natural and organic food products.
PepsiCo (PEP) also reported quarterly results before the bell. The company beat estimates by $0.04 while revenue rose marginally but missed estimates. Pepsi has been depending more on its snack food business as demand for soft drinks slows in the Americas. The company also boosted its annual dividend 15% and said it anticipates increasing share buybacks to around $5 billion for 2014.
And another stock to watch today will be Kraft Foods (KRFT). The company is expected to post earnings after the bell today of $0.61 a share which would be a $0.46 increase from the previous year while revenue is expected to grow 3%. Shares of Kraft are up more than 14% since this time last year.