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Stocks Climb on Comments from China’s Central Bank and Strong Economic Data

Dan Berman
Hot Stock Minute

Calming words from China and stronger-than-expected economic reports brought the bulls back to Wall Street at least for the day. All the major indexes were in the green with the Dow posting a triple-digit gain. The move higher was precipitated by statements from the People's Bank of China which said it will guide interest rates to reasonable levels.

On the economic front, the Commerce Department says orders for durable goods rose 3.6% when expectations were for 3.3%. Meanwhile the Conference Board says consumer confidence climbed to its highest level since January 2008. The index rose to 81.4 from a downwardly revised 74.3 the month before. The Case-Shiller housing composite index of 20 metropolitan areas jumped 1.7% in April. That surpassed estimates for a gain of 0.5%. Finally, the Commerce Department also says sales of new single-family homes rose 2.1% in May. That puts them at a seasonally adjusted annual rate of 476,000 units, which is the highest level in nearly five years.

Walgreen (WAG) may need a new prescription for success. Shares fell 6% today on release of the company's quarterly report. The drug chain posted earnings of 85-cents a share. That's a record, and up from 72-cents a year ago. However, it missed the consensus of 91-cents. Revenue also came in a hair shy of expectations at $18.3 billion. Walgreen is pointing to robust sales in its pharmacy department, but front-end sales were a weak spot. Cantor downgraded the stock to hold from buy yesterday.

Barnes and Noble (BKS) would surely like to turn a page. Shares plunged 17% today after the company reported losses that doubled since last year and fell far short of expectations. The bookseller says it lost $2.11 per share on revenue that fell 7% to $1.28 billion. The company says it is also shifting away from the manufacturing of its struggling Nook tablet, saying it will instead contract with another company to make the tablets. Meanwhile, sales continue to plummet at brick and mortar bookstores.

Carnival (CCL) sailed 5% higher today on word the company is trying to right its ship. While releasing quarterly results this morning, the company announced that longtime board member Arnold W. Donald is taking over as CEO. Micky Arison, the son of the company co-founder is stepping down from that post, but he'll remain chairman of the board. As for earnings, they came in a penny short at 5-cents a share. Though bookings have been down, Carnival's business has been helped in part by better deals on fuel prices than it had a year ago.

Homebuilder Lennar (LEN) pared early gains to close higher by less than 1% today after reporting earnings. The company easily beat estimates posting profits of 43-cents a share when estimates were for 33-cents. Revenue was also higher than the consensus coming in at $1.43 billion. That's a 53% jump from a year ago and reflects higher prices as well as more sales. Prior to today shares were down 18% over the past month, and 12% year-to-date following a run-up in 2012.

Shareholders of Men's Wearhouse (MW) must have liked the way things looked today. The stock rose nearly 6% on news that founder George Zimmer may be plotting a return to the company. Zimmer resigned from the board of directors yesterday. But Reuters reports he could team up with private equity to buy out the chain or wage a proxy battle. Zimmer was ousted last week from his job as company chairman. Insiders say his removal stemmed from growing battles with his hand-picked CEO, largely over whether to take the company private.