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Jump in Jobless Claims; Wal-Mart Misses, Google Gets More Gargantuan

Dan Berman
Hot Stock Minute
Jump in Jobless Claims; Wal-Mart Misses, Google Gets More Gargantuan

There was a barrage of economic data released at 8:30 am eastern, just as we were streaming live. The Labor Department says weekly jobless claims spiked to 360,000, up 32,000 from the prior week. Separately, the Labor Department says consumer prices fell again in April, this time by a seasonally adjusted .4%. Meanwhile the Commerce Department says housing starts slide by 16.5% in April to a seasonally adjusted annual rate of 853,000.

Wal-Mart (WMT) has missed estimates on earnings and revenue. The company came out with quarterly earnings this morning, posting $1.14 a share when consensus was for $1.15. Revenue was a whopping $114.2-billion, but $2-billion short of estimates. Wal-Mart, world king of retailers, is also lowering its guidance for the quarter ahead. The company has been dealing with complaints that its store shelves are empty because there aren't enough workers to restock them. Wal-Mart is also facing increasing competition from online sellers like Amazon. The stock hit a new 52-week high yesterday, up 35% from a year ago.

The head of the IRS's biggest wig has rolled. President Obama has forced Acting Commissioner Steven Miller to quit. Under Miller, the agency had been scrutinizing groups which were believed to have conservative leanings. The scandal has been grabbing attention all week. The President has expressed outrage calling the practice intolerable.

A hail storm of announcements has sent Google (GOOG) stock to an all-time high. Shares climbed more than 3% yesterday to close above $915 a share. Company CEO Larry Page spoke at Google's annual developer's conference-- just a day after announcing he has a condition that affects his vocal cords. He said technology is advancing slower than it should because companies are not cooperating with each other. But this drew scrutiny because Google which owns YouTube is now trying to block Microsoft from offering a YouTube app for Windows phones. Meanwhile there have been a series of other headlines to come out of the conference: Google is overhauling its maps program to customize it for each individual user; the company also says it's launching a subscription service to stream music; today Google will also announce that it's helping to create a new lab that will study quantum computing.


Cisco Systems (CSCO) is currently up 11% in early trading. The company beat estimates when it reported earnings after yesterday's closing bell. Cisco says profits were up 14% over last year, to 51-cents a share on more than $12.2-billion in revenue. The company credits growth in its newer businesses like software and services. It says they offset weakness in networking equipment. Prior to this morning's gains, Cisco is up 27% over the past year but just 4% since the start of 2013.

Dell (DELL) will be reporting after the closing bell. Keep in mind shareholders have been offered $13.65 in a takeover attempt by company founder and CEO Michael Dell, so the stock has been hovering right around that mark. But activist investor Carl Icahn is trying to engineer a better offer for shareholders. Plus Reuters is reporting that several hedge funds have increased their stakes in the company recently, meaning they too could try to orchestrate a deal. Dell is expected to post earnings of 35-cents a share on revenue of about $13.5-billion. Both those figures would be down significantly from a year ago as P-C sales shift to tablets.

Kohl's (KSS) came out with earnings at 7am. The company easily beat on earnings posting 66-cents a share when consensus was for 57-cents. But it missed on revenues. The company says same-store sales fell 1.9% and profits are in fact down from the same period last year. Kohl's stock is up 17% year-to-date. Though it's still more than $5 shy of its 52-week high which it hit back in October.

Another department store, Dillards (DDS), reported after the closing bell yesterday. The company blew away estimates on earnings, posting $2.50 a share when consensus was for $2.11. That's a 27% increase over last year. The company did however miss slightly on revenues. The Arkansas-based retailer says both sales and margins have improved. It also reports that it's benefitting from cost controls. The report follows Macy's earnings which were released yesterday morning and also beat estimates for net income. By the way, JC Penney, a direct competitor to both Kohl's and Macy's, will be reporting its quarterly earnings after the closing bell.