Mid-Day Update: Housing Data, Stimulus Speculation Has Stocks Rising for Second Day; Financials in Lead

By MidnightTrader.com Staff,

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U.S. stocks are adding to initial gains after the U.S. National Association of Realtors reported existing-home sales rose 3.4% in April.

Speculation that China and Europe will move to support economic growth also buoyed the markets, offsetting a downgrade of Japan's long-term foreign currency rating overnight and the Organization for Economic Co-operation and Development trimming projections for global growth to 3.4% this year from a 3.6% pace in 2011.

All 10 industry sectors in the S&P 500 are higher for a second day, led by financial stocks. Energy and material issues are gaining despite declines in crude oil prices today after Iran agreed to allow International Atomic Energy Agency inspectors at its Parchin military complex.

Sales of existing U.S homes rose last month for the first time since January in a sign the housing industry may be stabilizing. The increase lifted the sales pace to a 4.62 million annual rate, the highest pace since May 2010 and just trailing the median forecast of experts surveyed by Bloomberg News calling for a 4.61 million rate.

Median home prices climbed to to $177,400 in April, up 10.1% year over year, in part, due to a decline in foreclosures leading to fewer distressed sales at bargain prices.

Other U.S. economic news was less optimistic, however, with the Richmond Federal Reserve Bank reporting today manufacturing activity in the mid-Atlantic region slowed this month although it is still managing to eke out some growth. The Richmond Fed's manufacturing/general-business index fell to a 4 reading compared with April's 10 reading. Most subindices also fell, with new orders sliding from 13 in April to a 1 reading this month, although the employment index picked up -- rising to 16 to 10.

The weekly ICSC-Goldman Store Sales index earlier today also indicated a pullback in retail sales, falling for the fourth week in a row to minus 1.7%. The weekly Redbook survey also found some weakness, with 2.7% same-store sales growth during the week ended May 19, a full percentage point drop from the prior week.

But positive results reported out by several retailers is keeping consumer stocks on an upswing today. Best Buy ( BBY ) reported Q1 earnings of $0.72 a share, more than doubling last year's $0.35 profit and topping analyst expectations for a $0.59 a share gain. Revenues rose 6% to $11.6 million, also beating estimates.

Aeropostale ( ARO ) last night reported Q1 earnings of $0.13 per share, matching consensus opinion, while its $497.2 million in revenues exceeded the analysts' estimate by 5.5%. BBY shares are up nearly 3% while ARO is holding on to a 1% advance.

Also higher is Ralph Lauren ( RL ), gaining 1.5% after posting Q4 sales of $1.6 billion to beat the analyst mean of $1.59 billion on Thomson Reuters. EPS was $0.99, versus. expectations for $0.84 per share.

In other company news, General Mills ( GIS ) shares are flat today at around $38.55 each after the food company announced plans to lay off about 850 workers as part of a $109-million global restructuring effort. GIS said it expects to record about $94 million in pre-tax severance and the asset-writedown costs during its fiscal Q4 but is continuing to target FY'12 adjusted earnings in a range of $2.53 to $2.53 per share.

Commodities are mixed. Crude oil for June delivery was down 48 cents in late-morning NYMEX trade at $92.10 a barrel. June natural gas resumed its extended recovery today, adding 10.4 cents to $2.713 per 1 milion British thermal units following a 13-cent decline yesterday. June gold is down $12.40 at $1,576 an ounce while July silver is up 25 cents at $28.555 per ounce in New York Comex trade. July copper is little changed at $3.49 a pound, down 0.3 cents.

Among energy ETFs, the United States Oil fund is down 0.91% to $34.83 while the United States Natural Gas fund is up 2.98% to $19.33. The Market Vectors Gold Miners ETF is up 0.74% at $43.33 with SPDR Gold Shares sliding 0.55% to $153.80. The iShares Silver Trust is up 0.36% to $27.78.

Here's where the markets stand at mid-day:

NYSE Composite Index up 53.23 (+0.71%) to 7,596.21

Dow Jones Industrial Average up 31.33 (+0.25%) to 12,535.81

S&P 500 up 6.03 (+0.46%) to 1,322.02

NASDAQ Composite up 4.10 (+0.14%) to 2,851.31


Nikkei 225 up 1.10%

Hang Seng Index up 0.62%

Shanghai China Composite Index up 1.06%

FTSE 100 up 1.91%


NYSE Energy Sector Index up 0.80% to 11,633.78

NYSE Financial Sector Index up 1.55% to 4,293.96

NYSE Healthcare Sector Index up 0.49% to 7,169.12


(+) GENE, (+40%) Issues positive update for BREVAGen genetic test for breast cancer.

(+) RDN, (+15%) Major shareholder is pushing for more information on possible sale.

(+) BNHN (+21.1%) Agrees to $296-million going-private transaction.

(+) TSLA (+5.5%) Initiated with Buy rating at Maxim.


(-) CSUN (NOW -6.8%, was up by as much earlier) Reports smaller-than-expected $0.71 a share Q1 net loss.

(-) NAK (-18.1%) EPA warns of potential damage to salmon population from mine project.

(-) FNBN (-29.3%) Proposes 2-million share common stock offering.

(-) EXPR (-25.3%) Q1 sales trailed estimates by $7.2 million.

(-) FB (-4.3%) continues post-IPO move south.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: ARO , BBY , GIS , RL

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