Stock Market News for August 19, 2010 - Market News

Stocks managed to close higher for a second consecutive session, but the gains were modest as weakness in energy shares offset strength in retailers’ stocks. Target led the strength in stocks of consumer-discretionary companies after its profit outlook for the current quarter matched Street estimates. Its earnings, however, were lackluster.

Stocks started the day on a down note and lacked direction throughout the session before closing with tepid gains. Barring retailers, whose numbers are important for determining consumer spending patterns Wednesday had little to offer to investors. However, retailers’ earnings numbers were mixed. Target’s TGT shares jumped 2.5% while Chico’s FAS CHS shares jumped 10% after its stellar earnings numbers that also beat estimates.

BJ’s Wholesale Club BJ, however, disappointed after its numbers fell below analysts’ projections. The firm also lowered its outlook, sending its shares off 2.7%. Ann Taylor ANN jumped 5.4% and Kohl’s Corp. KSS added 3.7%.

Reports that Bank of Japan was considering measures to combat deflation, including introducing economic stimulus measures pushed up Asian equity markets today. In Tokyo, the Nikkei 225 Stock Average advanced 1.3% on the news.  In Mainland China, the Shanghai Composite index climbed 0.8% and the Hang Seng index in Hong Kong inched up 0.2%.

Meanwhile, the long-awaited initial public offering of General Motors was filed late yesterday. GM hopes to raise about $12 billion to $16 billion in common shares, and about $3 billion in convertible securities. The proceeds would lower the Treasury’s stake in the automaker to below 50%.

The Dow Jones Industrial Average added 10 points, or 0.1% to 10,416. Home Depot HD, yet again led the gainers on the DJIA, up 1.9%, after Citigroup C raised its price target on the firm to $38 from $34. Also pushing the DJIA higher were technology shares, with Cisco CSCO adding 1.6% and Hewlett-Packard HPQ gaining 1.3%. However, pulling the Dow lower were ExxonMobil XOM and Chevron CVX, off 1.1% and 0.9%, respectively. Oil prices dropped to $75.42 per barrel after a report said crude inventories rose to a record high.

The broader S&P500 index edged up 0.2% to close at 1,094, but failed to cross the psychologically-important 1,100 level. The NASDAQ gained 0.3% to 2,216. On the New York Stock Exchange, advancing shares beat those that fell in price by a three-to-two margin.

The mergers and acquisitions front remained active, with reports saying ArcelorMittal MT is planning a bid for US Steel X. However, S&P warned of a possible, one-notch downgrade to BHP Billiton's A+ credit rating. BHP Billiton’s BHP $39 billion bid for Canadian fertilizer maker Potash POT was turned down by the latter as inadequate. Other deals announced include Windstream's WIN offer to purchase Q-Comm for about $782 million and MasterCard's MA announcement to buy DataCash for $517 million.

Among companies slated to release results are several more retailers, including Sears Holdings SHLD, Gap GPS, Ross Stores ROST, and Staples SPLS. Also reporting are tech companies Hewlett-Packard HPQ and Dell DELL, both suffering under clouds of management issues.

 
ANNTAYLOR STRES (ANN): Free Stock Analysis Report
 
BHP BILLITN LTD (BHP): Free Stock Analysis Report
 
BJ'S WHOLESALE (BJ): Free Stock Analysis Report
 
CITIGROUP INC (C): Free Stock Analysis Report
 
CHICOS FAS INC (CHS): Free Stock Analysis Report
 
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
 
CHEVRON CORP (CVX): Free Stock Analysis Report
 
HOME DEPOT (HD): Free Stock Analysis Report
 
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
 
KOHLS CORP (KSS): Free Stock Analysis Report
 
ARCELOR MITTAL (MT): Free Stock Analysis Report
 
TARGET CORP (TGT): Free Stock Analysis Report
 
UTD STATES STL (X): Free Stock Analysis Report
 
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
 
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