Equities Update: Retail, Disney Lead the Way Up

4:10 PM, Nov 13, 2009 --

• DJIA up 73 (0.72%) to 10,270.47.
• S&P 500 up 6.24 (0.57%) to 1,093.48.
• Nasdaq up 18.86 (0.88%) to 2,167.88.

GLOBAL SENTIMENT

• Hang Seng up 0.70%
• Nikkei down 0.35%
• FTSE up 0.38%

UPSIDE MOVERS

(+) DIS continues evening advance that followed earnings beat.

(+) ANF beats with Q3 results.

(+) JCP meets with Q3 but sees improved FY vs prior guidance.

(+) LXRX continues evening jump that followed positive study results for irritable bowel syndrome.

(+) AEN rallies on positive arthritis study.

(+) A beats with results.

DOWNSIDE MOVERS

(-) JWN sees continued extended-hours decline after evening earnings disappointment.

(-) DCTH prices shares.

(-) CADX says FDA extends NDA for intravenous Acetaminophen by three months as previously added data will be major amendment to filing.

(-) DISK reports wider loss.

MARKET DIRECTION

Better-than-expected quarterly results from retailers J.C. Penney (JCP) and Abercrombie & Fitch (ANF), along with a strong quarter from entertainment giant Walt Disney (DIS) trumped a decline in consumer confidence in November and helped push stocks broadly higher on Friday. Traders bet that the retail numbers were a sign beleaguered consumers are tenatively starting to reopen their wallets and spend. The consumer confidence number, which dropped to 66 in November from 70.6 in October, was well below expectations near 72, but traders were in a mindset to dismiss the weak showing with some suggesting the market expects consumer sentiment to remain spotty in the near-term.

Traders were also quick to discard a widening U.S. trade balance in September. The trade deficit was up 18.2% in September. The deficit ballooned to its largest level in nine months and at $36.5 billion was well ahead of expectations of $31.7 billion. The bulk of the deficit was driven by a surge in imports, with much of that coming from rising oil shipments.

On the earnings front, Disney reported fourth-quarter profit and revenue late on Thursday that topped Wall Street's estimates. JC Penney (JCP) also reported Q3 earnings that topped the Street. Retailer Abercrombie & Fitch Co (ANF) posted a higher-than-expected profit as well.

Earnings season is quickly drawing to a close as the Thanksgiving/Christmas holiday season starts to take more of the market's focus in the upcoming weeks. However, there are several names due with quarterly results next week that will catch healthy action in both the extended-hours and regular sessions. On Monday, home improvement retailer Lowe's (LOW) is due with its results, followed on Tuesday by its competitor Home Depot (HD). Also on Tuesday, Autodesk (ADSK), Saks (SKS), Salesforce.com (CRM), Target (TGT), and TJX Companaies (TJX) are slated to report numbers. BJ's Wholesale Club (BJ), Hot Topic (HOTT), TheLimited (LTD) and NetApp (NTAP) will offer their results on Wednesday. On Thursday, Dick's Sporting Goods (DKS), GameStop (GME), Gap Inc. (GPS), Intuit (INTU), The Children's Place (PLCE) and Sears Holdings (SHLD) are slated to post financials.

It's a busy week on the economic calendar as well, with retail sales, empire manufacturing and business inventories due on Monday. Industrial production and PPI are slated for release Tuesday, and housing starts, CPI and crude inventories are due on Wednesday. On Thursday, we'll see initial claims data, leading indicators and the Philadelphia Fed.

Crude oil for December delivery fell 59 cents, or 0.8%, to close at $76.35 a barrel on the New York Mercantile Exchange. The contract lost 1.4% for the week.

Comments

[Nextel Acce...:]

sure hope this rally continues, nice to see your portfolio go up each day. Been a long time....

Nov 14 11:07 AM