U.S. Markets closed

Fears of Swoon As We Enter June; GM vs Ford; Will Smith and Son’s Stinker

Dan Berman
Hot Stock Minute
Fears of Swoon As We Enter June; GM vs Ford; Will Smith and Son’s Stinker

There's chatter of a possible June swoon as we get set to start trading for the new month. Concerns are being stoked by Friday's late selloff. The Dow dropped almost 209-points, shedding 1.36%. That was the largest point drop since April 15th. It marked the fifth decline in the last seven trading days.

We've got a number of economic reports coming out today which could move markets. The biggest of them is the ISM Manufacturing Index which comes out at 10am. Consensus is for the May number to rise to 51 from 50.7 in April. Also set for release at that time is construction spending for April, which is expected to post a 1% rise from March.

Also coming out today are auto sales for May. GM (GM) is expected to lead the pack, though Ford (F) appears to be running close behind. Edmunds is guessing GM moved 250,000 vehicles, a rise of 1.9% from a year ago. Ford is expected to have sold 244,000 cars and trucks, on a more substantial 13% climb. Edmunds predicts Toyota is running a distant third with 202,000 vehicles sold.

Where there's a Will there's usually a way to number one at the box office. But not so with the movie "After Earth." The Will Smith post-apocalypse adventure appears to be a universal dud. The film took in just $27-million at the box office this weekend. It cost Sony (SNE) $150-million to make. Beating it out, last week's number one, Fast and Furious 6, as well as the new thriller "Now You See Me." By the way the surprise hit of the season so far is Gatsby which is now on track to make 330-million worldwide.


Apple (AAPL) heads to trial in Manhattan today, accused of conspiring with five publishers to drive-up the price of e-books. This is a civil case brought by the Justice Department. If Apple is found liable, it could lead to damages from separate lawsuits filed by individual states. It could also open the door for private lawsuits too. Of course Apple currently has one of the ugliest charts around with the stock down 18% year-to-date, and trading at just about 65% of the high it set back in September. Some good news for Apple: just yesterday it inked a deal with Warner Music and could announce a streaming service to compete with Pandora (P) and Spotify later this week.

Next up is Microsoft (MSFT). All Things D is reporting the company is considering a major restructuring. The website says the goal is to turn Microsoft into a “devices and services" company. Just how Windows fits into that new model is unclear. CEO Steve Ballmer first hinted at the changes last October in his annual letter to shareholders. Microsoft shares are currently at their 52-week high with shares spiking in the past six weeks. One other note about Microsoft: Bloomberg reports the company is cutting the price of its Windows program for tablets, an incentive for hardware-makers.

Cracker Barrel (CBRL) has jumped more than 6% on the release of its quarterly report. The company posted earnings of $1.02 a share, beating estimates of 94-cents, and improving from 86-cents last year. Revenue rose to $640 million from $608 million last year and beat expectations for $630-million. The restaurant chain says same-store sales at its restaurants were up 3.1%, largely because of a 2.3% increase in menu prices. Same-store sales for its retail shops were up 5.5%. Cracker Barrel has been battling Biglari Holdings which owns a 20% stake in the company. Biglari claims Cracker Barrel's accounting for sales at its gift shops is flawed. But the accusations haven't hurt the stock. Prior to this morning, it has been up 38% year-to-date. Today's climb puts the stock at a new 52-week high.

Finally we look at another company reporting today, Thor Industries (THO), which designs, builds and sells various recreation vehicles, and mini-buses for market in the U.S. and Canada. It has a market cap of about $2.3 billion. The company is expected to report earnings of 88-cents a share up a dime from a year ago, on revenues that will just top $1-billion.