YAHOO [BRIEFING.COM]: Equities started the day on a down note
before staging a slow climb towards session highs. With thin volume and
economic data largely in-line, today's action occurred mostly around the
unchanged line. An afternoon push attempted to lift stocks to a higher close but
the move lacked conviction. As a result, the Nasdaq ended higher by 0.5% while the S&P 500 and
Dow finished flat.
Shares on the Nasdaq
outperformed the broader market. Within the group, Akamai Tech (AKAM 36.80, +1.36) and Limelight (LLNW 2.60, +0.09) were up 3.8% and 3.6%,
respectively. Both network companies rose on rumors which suggested AT&T (T 37.10, -0.15) will re-sell CDN
services provided by either of the two companies. Both vendors are negotiating,
with Akamai viewed as the favorite to win the contract.
Abercrombie & Fitch
(ANF 35.23, +2.90) was a session leader after beating on earnings and revenues.
Shares of the apparel producer jumped 9.0% in reaction to the results.
Competitors Aeropostale
(ARO 13.63, +0.40) and American Eagle (AEO 21.13, +0.29) got a lift from the
positive Abercrombie & Fitch results. The two stocks gained 3.0% and 1.4%,
respectively.
Two popular retailers saw contrasting performance following their earnings
releases. Staples
(SPLS 11.49, -1.96) plunged 14.6% after missing on earnings and revenues.
Today's selling dropped the shares to levels not seen since October 2002.
Meanwhile, Target
(TGT 64.50, +1.12) advanced 1.8% after exceeding earnings estimates and
reporting in-line revenues.
Energy was one of today's main laggards despite crude oil climbing 1.2% to
$94.50 and testing levels last seen in mid-May. The spike in crude comes on
renewed tensions between
Looking closer at the sector, Contango Oil & Gas
(MCF 55.12, -4.76) slid 8.0% after announcing its Chairman and CEO,
Gun makers Smith & Wesson
(SWHC 8.60, -1.16) and Sturm Ruger (RGR 45.39, -2.69) were under pressure
after receiving downgrades from KeyBanc Capital
Markets. Smith & Wesson fell 11.9% after being downgraded from ‘buy' to
‘hold' while Sturm Ruger slumped 5.6% after being
lowered from ‘hold' to ‘underweight.' The downgrades were handed down as
analysts believe the industry is near its peak profitability.
With the majority of second quarter results already delivered, a handful of
names remain on the earnings calendar. Cisco Systems (CSCO 17.35, +0.18) and Applied Materials (AMAT 11.80, +0.09) will report after
today's close. Cisco is expected to earn $0.45 on $11.61 billion revenues while
the consensus calls for Applied Materials to deliver earnings of $0.22 on
revenues of $2.32 billion.
Retail names will headline tomorrow's reports before the bell. Analysts are
expecting Dollar Tree
(DLTR 50.00, -0.62) to earn $0.47 on revenues of $1.71 billion while retail
giant Wal-Mart (WMT 74.45, +0.44) is
expected to report earnings of $1.17 on $114.80 billion revenues.
The Housing Market Index for August registered a reading of 37. That was up
from the prior month, and better than the reading of 35 that had been expected,
on average, among economists polled by Briefing.com.
Separately, industrial production increased during July by 0.6%, which was
in-line with expectations. The reading follows the revised 0.1% increase
experienced in the prior month. Capacity utilization hit 79.3%, which was also
in-line with expectations, and up from the prior month reading of 78.9%.
Consumer prices were unchanged during July, which was slightly cooler than the
0.2% increase that had been generally expected. Core prices
increased by 0.1%, which fell short of the 0.2% increase expected by economists
polled by Briefing.com.
Crude oil rallied into positive territory on better-than-expected
inventory data that showed a draw of 3.699 mln
barrels when a draw of 1.5 mln barrels was
anticipated. The energy component advanced further and set a session high of
$94.96 per barrel in afternoon action. It pulled-back slightly in the last hour
of pit trade but still booked a 1.0% gain as it settled at $94.35 per barrel.
It is worth noting that reports came out this morning suggesting that Israel is
planning a strike on Iran's nuclear facilities before the November U.S.
elections.
Natural gas, on the other hand, lost yesterday's momentum and tumbled deeper
into negative territory. It settled 2.8% lower at $2.75 per MMBtu,
just above its session low of $2.74 per MMBtu.
Gold came off its pit session low of $1596.30 per ounce and popped into
positive territory in reaction to weaker-than-anticipated manufacturing data.
The yellow metal continued to advance despite strength in the dollar. It
touched a session high of $1608.80 per ounce and eventually settled the session
with a 0.3% gain at $1606.60 per ounce.
Silver followed suit as it came off its session low of $27.54 per ounce and
rallied into the black. It popped to a session high of $27.96 per ounce in
morning action but was unable to hold the momentum. It pulled-back as the
session progressed and settled with a 0.2% gain at $27.80 per ounce.
Tomorrow's economic data will be focused on jobs data and housing. Housing
starts, building permits, and initial and continuing claims will be reported at
8:30 AM ET. The monthly