Retail Sales Rise; Wall Street Goes Up

July 25, 2009

U.S. stocks rallied on Thursday on investors’ relief that Federal Reserve Chairman Ben Bernanke was weathering a tough grilling in Congress relatively well.

Consumer discretionary shares had led stocks higher from early in the session, on positive news from the retail and home-building sectors that triggered a rally in the shares of home builder Lennar Corp and retailer Bed, Bath & Beyond.

The U.S. House of Representatives Oversight and Government Reform Committee questioned Bernanke on the Fed’s role in Bank of America’s takeover of Merrill Lynch, and whether he pressured BofA’s CEO Ken Lewis to go through with the deal after Lewis raised objections.

As the testimony wore on, however, analysts’ concerns faded and stocks sharply extended gains.

“There could have been a little apprehension ahead of this that Bernanke truly was in on forcing Bank of America (to buy Merrill), but that seems to have been blown a little out of proportion,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati, Ohio.

“Nothing out of the ordinary is being reported so we’re getting a relief rally.”

The Dow Jones industrial average .DJI gained 138.15 points, or 1.66 percent, to 8,438.01. The Standard & Poor’s 500 Index .SPX rose 15.64 points, or 1.74 percent, to 916.58. The Nasdaq Composite Index .IXIC added 29.20 points, or 1.63 percent, to 1,821.54.

Home builder Lennar Corp posted a wider quarterly loss, but reported an increase in new home sales and orders. Its stock shot up 14.2 percent to $8.94.

The Dow Jones U.S. home construction index .DJUSHB jumped 4.1 percent.

Retailer Bed Bath & Beyond Inc reported a surprising increase in quarterly profit as it cut costs to offset slumping demand, and its stock soared 10 percent to $31.24.

Another bright spot among retailers was J.C. Penney Co Inc, up 6.1 percent at $28.223 after JPMorgan raised its rating on the stock to “overweight” from “neutral.

The S&P retail index .RLX shot up 3.4 percent.

The broad S&P 500 has climbed as much as 40 percent from March’s 12-year closing low on hopes the economy was stabilizing, but jitters over the strength of a potential recovery have stalled the rally recently. The S&P 500 is up about 36 percent from that trough.

For further information, visit: http://www.reuters.com/article/hotStocksNews/idUSTRE5501YF20090625

Christopher Banks Profit Plunged

June 27, 2009

Shares of women’s clothing chain Christopher & Banks Corp. surged as high as 14 percent Thursday after first-quarter results exceeded Wall Street expectations, although profits plunged from lower sales.

The Plymouth, Minn., company said profit fell to $1.7 million, or 5 cents a share, from $11.3 million, or 32 cents a share, last year.

Net sales for the quarter ended May 30 fell 23 percent to $120.4 million from $155.4 million a year earlier, while same-store sales tumbled 24 percent as tough economic conditions continued to pressure sales.

The retailer said it expects the second quarter will remain challenging, with sales at stores open at least a year to be similar to the first quarter. The nation’s high unemployment rate and the prolonged housing market downturn have made many consumers reluctant to spend on all but the basic necessities.

Analysts surveyed by Thomson Reuters expected the company to report a loss of 5 cents a share on sales of $121 million.

Although CEO Lorna Nagler expressed disappointment with the company’s revenue growth, she said it was able to deliver positive cash flow and earnings, which represented “a meaningful improvement” from the fourth quarter.

She said the company also has made progress by reducing inventory levels and cutting sales, general and administrative expenses, which were trimmed by $7.5 million.

The company said it expects to be cash flow positive for fiscal 2010, but offered little additional guidance.

Christopher & Banks has 814 retail stores in 46 states. Its shares settled back in midday trading, to $6.03, up 9.6 percent.

For further information, visit: http://finance.yahoo.com/news/Christopher-Banks-1Q-profits-apf-2260413935.html?x=0