Major stock averages end with narrow gains, well off their best levels of the day. Stocks had extended gains in afternoon action, making new highs, after an auction of 30-year bonds drew solid demand. Stocks firmed throughout morning trading, benefiting from a better-than-expected weekly jobless claims report and the enthusiasm that met a new CEO at Palm (
PALM).
First-time jobless claims fell 24,000 to 601,000 in the latest week. Thomson Reuters' poll of economists had an average of 615,000 jobless claims.
The less-volatile four-week jobless claims average fell 10,500 to 621,750. Continuing claims hit a record 6.82 million from an upwardly revised level in the prior week.
The laggard today is the retail sector after May retail sales rose 0.5%, below the 0.7% gain that Wall Street economists expected.
Company news also pulled on the sector. Lululemon (
LULU) sinks after it reports Q1 revs of $81.7 mln, up from $77 mln a year ago and better than the analyst mean of $74 mln on Thomson Reuters. EPS was $0.09, down from $0.12 a year ago and a penny better than the Street view.
For Q2, the company sees revs in the range of $85 to $90 mln and EPS of $0.08 to $0.09 per share, vs. current Street analyst estimates of $83 mln in revs and earnings of $0.11 per share.
April business inventories declined 1.1%, which is slightly steeper than the 1.0% downturn that was widely expected. The disappointing figure, though, likely had little impact on the market since business inventories is considered by many "old" data since it is a month behind in reporting versus other reports. March business inventories were downwardly revised to show a 1.3% decline.
Gains in the technology-laden Nasdaq index were led by PALM, which said Jon Rubenstein would replace Ed Colligan as the company's CEO.
Bank of America
(BAC) was firmer, pushing up the broader financial space. Keefe Bruyette & Woods reportedly raised its rating on BAC to Outperform from Market Perform. Regions Financial (RF) was higher on an upgrade to buy at Goldman Sachs.
Human Genome Sciences (
HGSI) was an active gainer after it announced the presentation of results from a long-term Phase 2 continuation trial showing that BENLYSTA (belimumab, formerly LymphoStat-B) was associated with sustained improvement in disease activity across multiple clinical measures, decreased frequency of disease flares, and was generally well tolerated through four years on treatment in combination with standard of care in patients with serologically active systemic lupus erythematosus (SLE).
UnitedHealth Group (
UNH) slides on a downgrade to underperform at Oppenheimer & Co.
July crude futures contract rose $1.35, or 1.9%, to end at $72.68 a barrel on the New York Mercantile Exchange, the highest settlement for a front-month contract since Oct. 20. It rose to $73.23 earlier. In electronic trading, the contract slid marginally, down $0.11 at $72.57.
- NYSE up 65.1 (1.1%) to 6,163.13.
-DJIA up 31.9 (0.4%) to 8,771.
-S&P 500 up 5.7 (0.6%) to 944.89.
-Nasdaq up 9.3 (0.5%) to 1,862.
GLOBAL SENTIMENT
Hang Seng up 5.37%
Nikkei down 0.1%
FTSE up 0.78%
UPSIDE MOVERS
(+) BAC gets analyst upgrade
(+) PALM naming new CEO.
(+) MBRX gets one-time payment from Merck.
(+) STAA gets FDA clearance for injector system.
(+) GSK gets upgrade.
(+) WYE reports investigational vaccine has potential for pneumococcal disease.
(+) RF gets upgraded at Goldman Sachs to buy due to valuation.
(+) REGN edges back into positive ground after scoring deep losses on earlier news it would not submit its ovarian cancer drug study results. It also enters royalty pact with Novartis.
DOWNSIDE MOVERS
(-) LULU falls after results.
(-) UNH gets downgraded to underperform at Oppenheimer.
(-) QCOM bobbed on either side of even, giving up early gains made on raised Q3 revenue guidance.
