Stocks End Higher After Earnings, Data
U.S. Market
Stocks rose today despite disappointing growth data out of Europe and Wal-Mart’s cut to its full-year outlook.
Initial unemployment claims were up by a larger-than-expected 21,000 last week to 311,000. The less volatile four-week moving average was rose by 2,000 to 295,750 in the week. Claims are still near levels last reached in 2006.
At market close the S&P 500, Dow and Nasdaq were each 0.4% higher.
Stocks on the Move
Wal-Mart (WMT) reported second-quarter results that exceeded our expectations on the top line, but higher-than-expected health care costs resulted in operating profit coming in slightly below our forecast (operating margin contracted 20 basis points to 5.6%). Management increased its forecast for higher health care costs to $500 million (from $330 million initially) and incremental investments in e-commerce and technology infrastructure, which combined prompted management to reduce its full-year earnings per share guidance range to $4.90-$5.15 (versus $5.10-$5.45 previously). Shares were up less than 1% at market close.
Cisco (CSCO) posted solid fiscal 2014 fourth-quarter results despite strong headwinds in most emerging markets and continued weakness in the service provider segment. Total revenue declined less than 1% year over year and increased 7% versus the prior quarter, the strongest sequential growth rate since sales recovered coming out of the financial crisis. Cisco expects fiscal 2015 first-quarter revenue will be flat to up 1% year over year, implying a small sequential decline. Shares were off 2.6% at market close.
Shares of Kohl's (KSS) were up over 3.3% after the firm reported second-quarter results. Revenue came in a little below the mean of analyst expectations at $4.2 billion compared with $4.3 billion in the same period last year. The company net increased its store count by 5 to 1,160, although same-store sales declined 1.3%. Operating margins improved to 10.6% compared with 10.5% last year, and operating margin dollars were even with last year at $451 million.
