Stocks Posting Small Gains

Published on Wednesday, 08 August 2012 13:16 Written by Christopher Lynn

New York, August 8^th  (TradersHuddle.com) – Stocks were holding small gains, after erasing earlier losses and were trading in a tight range. Participants were cautious but till continue to bet on further stimulus measures from central banks around the world.

The Dow Jones Industrial Average was gaining 0.11%. The S&P 500 index was adding 0.08%, while the NASDAQ was climbing 0.01%

The market started in negative territory amid a relative quiet overseas session. Participants took a breather after pushing stocks higher to fresh 3-month highs, with the major benchmark indices trading above key levels on hopes central banks around the world will introduce further stimulus measures. German trade balance data topped expectations, while the Bank of England slashed its growth outlook for the year.

But the market was able to shake off the weak opening, with the major indices reversing to small gains.

Among the S&P 500 sectors, consumer staples, materials, and healthcare were posting the biggest gains, while consumer discretionary, industrials, and utilities were falling. The staples sector was receiving a boost from earnings reports in the space. Dean Foods (NYSE: DF) was surging 36% to $16.9 after its quarterly results beat earnings expectations on revenues that were shy of consensus, while it issued upside earnings guidance for the current quarter and full year results. The company also announced the filling of an IPO registration for its wholly owned subsidiary, The WhiteWave Foods Company. Dean Foods plans to spin off the subsidiary, distributing the 80% of shares that it will still own after the IPO to its shareholders.

Tyson Foods (NYSE: TSN) was also a top performer, jumping more than 7%, rebounding from its drop early in the week after reporting weaker-than-expected quarterly sales and earnings and lowered its full-year outlook.

On the discretionary side, poor earnings and same store sales from McDonald’s (NYSE: MCD) were dragging the sector lower, despite some positive news from Macy’s (NYSE: M) and Walt Disney (NYSE: DIS). The world’s largest restaurant chain was falling 1.6% in the session, weighing also in the Dow Jones Industrial Average, after it posted flat same-store sales figures, hurt by Europe and sluggish demand in the U.S.

Meanwhile, Priceline (NASDAQ: PCLN) was tumbling more than 16% after its earnings results and guidance disappointed. The company said that the strong Dollar had a significant impact on second quarter results and cited the weakness in the global economy and European headwinds as the reason behind the cautious guidance. Ralph Lauren (NYSE: RL) was falling 1.7% after rebounding from a low of $142.39. The company reported earnings that beat expectations by $0.24 per share on revenues that were inline with consensus, but said that it sees revenues for the current quarter below consensus.

On the flip side, Macy’s (NYSE: M) was posting the best gain in the sector, as shares rallied 2.8% after posting earnings that topped expectations on revenues that were inline with consensus. The retailer also raised its fiscal 2013 EPS guidance to inline with consensus.

Walt Disney (NYSE: DIS) was gaining 1.3% to $50.46 after posting better than expected earnings on revenues that were below consensus. The stock initially dropped, but analysts seemed to have liked the report, as several raised their target prices on the stock. Participants focused on results from ESPN and theme parks and resorts.

In tech land, Hewlett-Packard (NYSE: HPQ) rallied 2.3%, posting the biggest gain in the blue chip index, after the company raised its third quarter earnings guidance above consensus. The PC maker said that it expects a profit of $1 per share, which is above the range of $0.94 to $0.97 per share expected by analysts.

Computer Sciences (NYSE: CSC) was surging, leading the technology sector after beating earnings estimates by $0.04 per share. Revenues fell 1.9% from a year ago to $3.96 billion versus consensus of $3.89 billion.

Apple (NASDAQ: AAPL) was climbing 0.17% to $622, trading along the broad market. The high profile patent trial in California continued to produce headlines, while many analysts and pundits believe that the all-time high of $644, might be breached in the next weeks ahead of the short-term product refresh cycle.

Elsewhere, Research In Motion (NASDAQ: RIMM) rallied more than 6% amid chatter that the company might be in talks with Samsung to license the upcoming BlackBerry 10 platform.