Nixed at six. Stocks rose today breaking a six-day losing streak for the Dow despite a 3-hour trading halt on the Nasdaq due to technical issues. Although trading resumed near the end of the day, questions remain as to what caused the Nasdaq glitch that left many on Wall Street (and Washington) concerned.
It had been the Dow's longest move down in more than a year. The after-effects of the slide are still there however. The Dow now remains below 15,000. What exactly lifted the indexes back into the green? Encouraging manufacturing data in China and the Euro zone. It seemed to outweigh lingering worries about the Fed tapering its bond-buying initiatives. Here at home the biggest economic report of the day was the Labor Department's weekly release of jobless claims. There was an unexpected jump to 336,000 news claims when expectations were for 330,000. Last week's number was revised up to 323,000 from 320,000. That's still the lowest number in roughly six years.
Abercrombie & Fitch (ANF) tanked nearly 18% after the retailer reported earnings of 14-cents a share, just half of what was expected. Compare that to last year when earnings were 20-cents a share. Revenue was also about 5% below expectations at $945-million dollars versus $997-million. The company says comparable sales both in-store and online fell 10% from a year ago. So far the company is not adjusting its full year guidance, but says it expects problems to get worse. Even before today, shares of Abercrombie were down in 2013. By the way, Abercrombie competitor American Eagle Outfitters (AEO) rose nearly 3% today after losing 10% yesterday on its own weak earnings report.
Sears Holdings (SHLD) fell more than 8% after reporting a quarterly loss this morning. It was little surprise that the company posted losses, but at $1.46 a share they were considerably wider than the estimates of minus $1.10. Revenue was also lower than expectations at $8.87-billion versus $9.013-billion. On the positive side, online sales at both Sears and K-Mart stores were up 20% over last year. Still, overall sales are down well over 5%. Today's losses add to a 23% drop in the stock over the past year.
Dow component Hewlett-Packard (HPQ) suffered a double-digit drop on it earnings which came out after yesterday's closing bell. Hopes of a turnaround seemed to dim on revelations that revenues dropped 8% for the quarter. Weaknesses extended beyond PCs and into other businesses including servers. The company also lowered expectations moving forward, saying not to expect any sales growth next year. In this case, the numbers pretty much matched expectations with adjusted earnings of 86-cents a share on $27.23-billion in revenue. Prior to today's losses, shares were up 69% this year.
Dollar Tree (DLTR) and Hormel (HRL) were among the other companies reporting today as earnings season draws to a close. Dollar Tree earned 56-cents a share, a penny below estimates. Hormel earned 42-cents a share, missing estimates by three cents. The company says sales were in fact up, but margins were hurt by higher pork costs.
Men's Wearhouse (MW) bucked the retail trend lower, rising nearly 2% on talk of a buyout. Ousted founder George Zimmer is reportedly readying an offer. Women's Wear Daily says he is trying to assemble a team to make a bid. Zimmer personally holds 3% to 5% of the company's shares. He was ousted from the board in June.