Stocks struggle despite retail sales rebound

Stocks end flat after early gains fade. US retail sales rise for the first time since February. Home Depot, Estee Lauder and Michael Kors results impress. Groupon slumps. Standard Chartered settles Iranian money-laundering charges.

By Charley Blaine Aug 14, 2012 12:38PM
Charley BlaineUpdated: 7:09 p.m. ET

For Home Depot (HD), Estee Lauder (EL) and Michael Kors Holdings (KORS), today was a good day. Earnings were good, terrific and spectacular, respectively, and shares of all three are up nicely.

For Groupon (GRPN), the day was dismaying, at best. The stock fell  $2.04 to $5.51 after hitting a new low of $5.46. Earnings were OK on the surface, but the core coupon business actually looks to be shrinking.

Sadly for bulls, the energy created by the government's report on July retail sales dissipated, and the major averages basically ended the day flat. The Commerce Department said retail sales were up 0.8% in July, the first gain after four months of declines. Retailers and consumer stocks are the market leaders. Utilities, materials and coal stocks were the laggards.

Keeping the market in check was news that the economy in the eurozone -- the nations that use the euro as their currency -- fell 0.2% in the second quarter. Germany saw only 0.3% growth and the French economy was stagnant. In addition, the CEO of Brazilian mining giant Vale (VALE) may have set off some selling when he told a conference in Rio de Janeiro today, "We are not going to see the spectacular growth rates of 10, 12% per year." And Castello Branco added, "The golden years are gone."

The Dow Jones industrials ($INDU) finished up just 3 points to 13,172. The blue chips had been up as many as 54 points. The Standard & Poor's 500 Index ($INX) was flat at 1,404. The Nasdaq Composite Index ($COMPX) lost 6 points to 3,017.

Article continues below.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, fell 1 point to 2,728. Apple (AAPL), the biggest influence on the index, was up $1.69 to $631.69, about $12 below its all-time intraday high of $644. Apple had been as high as $638.61.

Crude oil (-CL) in New York settled up 70 cents to $93.43 a barrel. Brent crude was up 49 cents to $114.09 a barrel. The average price of gasoline at the pump was $3.702 a gallon, up from Monday's $3.696 and up 11.3% since July 2, according to AAA's Daily Fuel Gauge Report.

Gold (-GC) settled down $10.20 to $1,602.40 an ounce. Copper (-HG) moved up slightly to $3.359 a pound. Silver (-SI) was basically flat at $27.763 an ounce.

Interest rates were higher, with the 10-year Treasury yield rising to 1.726% from 1.654% on Monday. The dollar was slightly lower against major currencies.

Wednesday will be a big day for earnings. Cisco Systems (CSCO), Target (TGT), Deere (DE) and Abercrombie & Fitch (ANF) are scheduled to report.

The government will release its Consumer Price Index report for July, along with reports on industrial production and crude oil inventories.

Futures trading suggests a modestly lower open on Wednesday.

The pullback chances are increasing
The market's fade today reflects the growing odds of a pullback. The relative-strength indexes on the S&P 500 and the Nasdaq were above 79. The Dow was at 75.

A relative-strength index measures the strength of an index against past performance. The most popular measure is against 14 days of performance. A reading above 70 suggests something is overbought.

There are other reasons to be concerned. Since the Dow hit 13,118 on Aug. 3, the index has basically traded within a 100-point range. The S&P 500 is little changed since topping 1,400 on Aug. 7.

Both suggest the rally is getting tired.

And when Wall Street comes back from vacation after Labor Day, volatility could increase.

Energy prices -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Crude oil (-CL)

$93.43

$92.73

6.10%

-5.46%
(per barrel)











Heating oil (-HO)

$3.0346

$3.0183

6.55%

4.13%
(per gallon)











Natural gas (-NG)

$2.8340

$2.7290

-11.69%

-5.19%
(per mil. BTU)











Unleaded gasoline (-RB)

$3.0014

$2.9907

8.19%

12.94%
(per gallon)











Brent crude 

$114.03

$113.60

8.74%

6.25%
(per barrel)











Retail gasoline

$3.7020

$3.6960

5.77%

13.00%
(per gallon; AAA)












A good day for retailers . . .
Home Depot was the top performer of the 30 Dow stocks, rising $1.89 to $54.71. The home-improvement retailer said same-store sales were up 2.1% from a year ago, the fifth straight quarterly increase, as consumers visited more often and spent more per trip.

Estee Lauder, the maker of Mac and Clinique skin care, rose $5.12 to $60.13. It was the second-best performer among S&P 500 stocks behind Monster Beverage (MNST). Estee Lauder earned 17 cents a share in the fiscal fourth quarter. Analysts had expected 16 cents. Revenue was $2.25 billion, up 9.2% and ahead of the consensus estimate of $2.21 billion.

Michael Kors Holdings shares were up $6.98 to $49.33. The company said fiscal-first-quarter earnings nearly tripled, as the fast-growing fashion company saw double-digit same-store sales gains in North America and Europe and also recorded a rise in licensing revenue. Revenue jumped 71% to $414.9 million. The company, which went public in December, sells clothing, footwear and other apparel and accessories through luxury department stores and its own company-operated shops. The stock went public at $20 on Dec. 14 and is up 141% since then.

This trio weren't alone in winning Wall Street's love. Saks (SKS) shares jumped 67 cents to $11.52 after its fiscal-second-quarter loss beat Street estimates. TJX Companies (TJX) shares rose 79 cents to $45.03 after its results beat estimates.

. . . Not so good for Groupon
Groupon could only wish for the love Michael Kors and Estee Lauder were getting. Instead, its stock was crushed.

The daily-deals site reported revenue of $568.3 million, missing the Street estimate of $573.1 million. Earnings per share were 8 cents, excluding one-time charges. The Street had expected 3 cents.

Not a bad quarter, but investors were very nervous. As Benzinga's Chris Poley noted, "Anything that wasn't a huge beat was going to send them fleeing for the exits."

British bank settles on Iranian money-laundering charges
Talk about a quick about-face. Standard Chartered (SCBFF), Britain's fifth-largest bank by assets, agreed to pay $340 million to settle a charge that it had laundered $250 billion of transactions though its New York office.

The agreement was with Benjamin Lawsky, New York state's Superintendent of Financial Services. Standard Chartered agreed to install a monitor chosen by Lawsky's office to oversee its international transactions. The bank also agreed to appoint its own auditors in its New York office to oversee compliance with U.S. money-laundering laws.

The settlement came after Lawsky leveled his charges aganst the British bank, threatening to revoke the bank's license to operate in New York state.

Lawler's move upset financial regulators in the United States and Britain, and Standard Chartered at first said no more than $14 million of transactions violated U.S. laws. Standard Chartered shares fell 23% the day after the charges were announced.

Standard Chartered shares jumped $1.60 to $22.60 in New York. The announcement came after stocks had closed in Britain. The British shares had risen 25.87 pence, or 1.94%, to 1,359.57 pence in London trading. The shares are still off 7.5% from their close before the controversy erupted.

Home Depot leads the Dow, but Europe weighs on market
Only 13 of the 30 Dow stocks were higher, led by Home Depot, Pfizer and Wal-Mart Stores (WMT), which reports second-quarter results on Thursday. The laggards included heavyweights IBM (IBM), Caterpillar (CAT) and Boeing (BA), all of which have heavy exposure to Europe.

Meanwhile, 199 S&P 500 stocks were higher, led by Monster Beverage, Estee Lauder and Home Depot. Forty Nasdaq-100 stocks were higher, led by Monster Beverage and Vertex Pharmaceuticals (VRTX), up $5.32 to $58.59 and $2.11 to $53.53, respectively.

Monster jumped after announcing it would double the size of a share buyback.

Short hits from the markets -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.100%

0.00%

900.00%
5-year Treasury note 

0.746%

0.702%

24.54%

-10.12%
10-year Treasury note

1.726%

1.654%

15.68%

-7.75%
30-year Treasury bond

2.825%

2.739%

9.62%

-2.22%
Currencies











U.S. Dollar Index

82.527

82.486

-0.22%

2.49%
British pound

1.5691

1.5689

0.06%

0.99%
(in U.S. $)

 








U.S. $ in pounds

£0.637

£0.637

-0.06%

-0.98%
Euro in dollars

$1.23

$1.23

0.25%

-4.83%
(in U.S. $)

 








U.S. $ in euros

€ 0.811

€ 0.811

-0.25%

5.08%
U.S. $ in yen 

78.86

78.33

0.95%

2.29%
U.S. $ in Chinese

6.38

6.36

0.35%

0.86%
yuan











Canada dollar

$1.009

$1.008

1.16%

2.82%
(in U.S. $)

 








U.S. dollar 

$0.992

$0.992

-1.07%

-2.74%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,602.40

$1,612.60

-0.50%

2.27%
(per troy ounce)

 








Copper (-HG)

$3.359

$3.354

-1.71%

-2.24%
(per pound)

 








Silver (-SI)

$27.7630

$27.7670

-0.54%

-0.54%
(per troy ounce)

 








Wheat (-ZW)

$8.3975

$8.5675

-5.46%

28.65%
(per bushel)

 








Corn (-ZC)

$7.8900

$7.923

-2.02%

22.04%
(per bushel)

 








Cotton 

$0.7209

0.7169

1.05%

-21.37%
(per pound)

 








Coffee

$1.6600

1.6705

-4.82%

-27.72%
(per pound)

 








Crude oil (-CL)

$93.43

$92.73

6.10%

-5.46%
(per barrel)










 

381Comments
Aug 14, 2012 3:20PM
avatar

Lets break it down:

Negative for retail

Personal income growth less than zero factoring for inflation.

Labor paticipation rate at almost hisoric lows.

Bankruptcys still at historically high levels.

Savings rate at all time low.

Energy costs at near historic highs.

Consumer unsure about job security.

Positive for retail-

Homeowners not paying their mortgage.

Increase in prices.

Aug 14, 2012 1:09PM
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Hello Retail Sales Up? How about back to school spending? No Brainer DAH!!!

And Charlie gets paid for this!!! Surf, cut, paste and post. Must pay well he is always smiling

Aug 14, 2012 1:56PM
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GOVT. BUYING BEEF AND PORK?

 

Why is the govt. going to buy $170 million of pork and beef from producers? Most of the money will go to large conglomerates not family farms. If there is a glut of meat products on the market let the price fall and consumers reap the benefits. All of the corn is going to mandated ethanol for fuel, which just drives the price up.

If our most wise socialist leader and his pawns would just let all the markets rise and fall on their own we would be out of the financil mess already. Bail out the banks-bail out the beef conglomerates-bail out the auto makers-All at the expense of the American people.

What a pile of crap!!!!

Aug 14, 2012 2:46PM
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I wish Harry Reid cared as much about how he spends our money as he does about how Romney spends his. 
Aug 14, 2012 3:07PM
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Just remember Lady, all the data is skewed without a complete audit of the Fed. Seems Happy Harry, who for years has been grandstanding about introducing legislation to force an audit of the Fed., has reversed his position because he knows so many of his political friends will go to jail. Such a move would expose the unprecidented level of corruption that is rampant in our political and financial systems.
Aug 14, 2012 3:22PM
avatar

We had a great summer Olympic run. The USA got over 100 medals with almost 50 of them being Gold. However, I really don’t think all those athletes earned their Gold Medals. It always amazes me that some athletes think they are better than others. Some athletes think that they are stronger or faster or work harder than the other ones do, but, I have to tell you there are a lot of hard-working athletes out there. There are a lot of smart ones too. These Gold medal athletes didn’t get there on their own. They didn’t do it on their own. Along the way, they had some help. In the name of fairness, Obama should invite them all to the White House and take away their medals and give them to the people that didn’t receive medals… Get it? Got it? I doubt it.

Aug 14, 2012 2:48PM
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The Dow Jones Industrial Average, reached its highest point Oct. 9, 2007. After closing at 14,164.53. Unemployment was less than 5%. Debt was under a trillion.

That's less than 5 years and trillions in stimulus spent (and wasted). What a bargain. Sign me up for 4 more years of that s***t. 


Aug 14, 2012 3:29PM
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USNEWS AND WORLD REPORT APRIL 9th, 2012 Lauren Fox 

-Marking the similarities between President Barack Obama's time in office and former president Jimmy Carter's is nothing new. But as of Monday, Obama has hit one more Carter benchmark - both saw gas prices double in their first term of office. 

In fact, while just barely, Obama has seen an even higher gas price increase than Carter dealt with under his administration.

Under the Carter administration, gas prices increased by 103.77 percent. Gas prices since Obama took office have risen by 103.79 percent.

Aug 14, 2012 3:19PM
avatar
Under the Carter administration, gas prices increased by 103.77 percent. Gas prices since Obama took office have risen by 103.79 percent.  

But, that should not be a surprise since he thinks Americans should be paying as much if not more than Europe. Even though the UR A PEE'ins produce a small fraction of the worlds supply.

Aug 14, 2012 2:19PM
avatar
I know which way the economy is headed so I'm buying stock in handbasket manufacturers.
Aug 14, 2012 4:28PM
avatar

This is what I think said:

 

"So Jeff R, are you going to sign up for 4 more years of George W. Bush policies?"

 

TIWIT:

 

I'd be careful questioning Jeff's mental capacities, since you apprently don't even know who is running for President.  In case you weren't aware, Bush is not running for president this year.

 

Bush has been gone for almost 4 years.  Get over it.  I understand why you don't want people to actually look at BHO's record.   It is an abysmal failure.  He has shown zero ability to actually implement any policies that are improving anything.

 

You can argue until the cows come in about "whose fault our predicament is" however the issue today is HOW TO GET OUT OF THE SITUATION.

 

Blaming the past for YOUR FAILURE TO MAKE HEADWAY TODAY, is childish and not indicative of true leadership.   REAL LEADERS DON'T BLAME OTHERS FOR THE SITUATION THAT EXISTS.  RATHER, THEY MOVE FORWARD AND MAKE POSITIVE CHANGE.

 

Since Obama has not and cannot make any positive change, all he has is blame.  Apparently, that is all that his minions have as well.       

Aug 14, 2012 4:16PM
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100% of people WITH "skin in the game" are 100% behind the President Romney/ VP Ryan team. The stock market is pitifully inflated since the dims took over 11/2006 and crashed the economy. My portfolio is still down 13% in real terms and 24% in reality when I include the inflation printing money 24/7/360 has created. The debt clock just rolled over to $16 trillion. It's just a matter of time before the [communist] Chinese refuse to lend us more money when we pay it bck with deflated paper money.
Aug 14, 2012 2:13PM
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Welcome to the Spin, Pump and Dump. The comedy show where you will see the daily economy spin for the day (Europe? China? Oil? War? Retail Sales? Housing Market?), pump up  hopes for a good rally in the market for the week then the dump for the bankers to pay for their Hampton vacations until labor day. Wait till October if you really want a wild ride!!!
Aug 14, 2012 1:25PM
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believe this story ?  maybe they will give you heads up on some new angle !!!!  another way to flece the investor! watch out they are not doing you any favors ,they are looking out for themselves as always!!!!!  they will always come out on top!! either way they win!!!!!!!!!!
Aug 14, 2012 2:11PM
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Goldman Sachs, HSBC, Knight Capital, MF Global ...

Friends of the FED and Justice Dept.
Aug 14, 2012 3:10PM
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Has anyone asked the amount of the "positive retail sales report" numbers derived by consumer  reatail spending utilizing credit? Improved spending, while increasing debt is not a sign of healthy economic  growth.

 

Aug 14, 2012 4:55PM
avatar

Longbeach:

 

Clear thinking people don't like Bush's name being brought up AT THIS TIME because it is unhelpful to correcting any problem.

 

Contrary to your childish claim, it is not about getting panties in a wad.  It is about GROWING UP AND BEING AN ADULT.

 

It is time for Obama and his supporters to grow up and STOP BLAMING AND FIX THINGS OR ELSE MOVE ASIDE AND LET SOMEONE ELSE.

 

You know if, Obama actually had the country moving in a positive direction, there would be no need to blame the guy before him.  IT IS ONLY WHEN YOU ARE FAILING THAT YOU NEED TO BLAME SOMEONE ELSE.

 

IF YOU ARE SUCCEEDING, THEN THERE IS NO NEED TO BLAME.  YOU JUST POINT TO YOUR SUCCESS.  Apparently Obama and his followers can't do that.  

Aug 14, 2012 2:04PM
avatar

Consumer rebound in July ! Yes of course we are out there spending our money as Goldman Sachs, HSBC, Knight Capital, MF Global get away with billions of dollars in stolen investors money and not one arrest or criminal charges filed ! Yes consumer confidence is way up on the rebound !

Aug 14, 2012 4:10PM
avatar
Does anyone believe Obama will subject his family to the same government run medicine he will have us on?

 ---- No they will be part of the 1% (political class) that is exempt and will have access to top notch care through medical tourism.

REGARDLESS - OK Mr. Pres. - What is your proposal on fixing any entitlement ?  
                                                         ANSW:   You have no clue !    You only want power and will vomit up anything to sway voters.
Aug 14, 2012 4:46PM
avatar
My husband and I are both losing our jobs in December.  The company can't make it work after 47 years in the construction business.  Turn about is fair play, I hope the current admin loses their jobs too.
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