U.S. Markets closed

Stocks Break Losing Streak; Gannett and Belo Skyrocket on Deal

Dan Berman
Hot Stock Minute

Stocks broke a three-day losing streak today with the Dow staging a triple-digit rally finding its footing above 15,000 again. Markets were buoyed at least in part by two encouraging pieces of economic data. Retail sales were up 0.6% in May, topping estimates which were for 0.5%. The Labor Department says there were 334,000 new weekly jobless claims. That also beat estimates which were for 350,000 new claims.

Both Gannett (GCI) and Belo (BLC) skyrocketed more than 25% on news that the former company is acquiring the latter. Gannett, the country's largest newspaper company will pay $1.5 billion for Belo with the goal of expanding its broadcast business. The purchase price represents a 28% premium on Belo's closing price yesterday. The deal will almost double Gannett's broadcasting assets to make it the fourth largest owner of major network affiliates.

Safeway (SWY) closed 7% higher after announcing late yesterday that it's getting out of Canada. Competitor Sobeys is buying the stores for more than $5 billion. Safeway is the second largest grocery store operator in the U.S. It will use the cash to draw down its debt and buy back shares.

Clothing conglomerate PVH (PVH) soared 10% on its quarterly earnings which were released after yesterday's closing bell. Excluding items the company made $1.91 a share on coincidentally $1.91 billion in revenues. That easily beat estimates of $1.35 a share. It's also a whopping gain from a year ago with revenue up 34%. So, why the jump? PVH completed its purchase of competitor Warnaco Group in February, giving it more control of the Calvin Klein brand. The deal also added brands like Speedo to the company's portfolio.

Coty (COTY) looked a little like a stink-bomb in its market debut. The fragrance-maker closed down 1% on its first trading day on the NYSE. Coty issued more than 57 million shares at $17.50, which was the midpoint of its expected range. The company was founded more than 100 years ago in Paris. While it may be best known as the marketer of celebrity fragrances, in recent years it has expanded its line to include a number of personal health products.

Next we look at RBS (RBS) which pared earlier losses to close nearly 2% higher. Sources say the company will shed 2,000 jobs in an effort to cut the size of its investment bank. That news comes on the heels of an announcement that CEO Stephen Hester will leave by year-end. The company board ousted Hester saying it wants new leadership as it pushes toward privatization. RBS shares were down nearly 4% yesterday and the stock is up 43% over the past year.

Finally, discount retailer Five Below (FIVE) rose nearly 4%. The company posted quarterly results yesterday afternoon saying it earned 5-cents a share when estimates were for 4-cents. Revenues were also higher than expected. The chain says its sales during the quarter soared 30%. That's due in part to the opening of 14 new stores. The chain hopes to open 60 more stores in time for the winter holidays. Five Below went public back in July and is up 39% since then.