Stocks rise on European data, US retail sales

Growth reports in Germany and France come in better than forecast. Retail sales in the US increase for the first time in 4 months. Groupon shares plunge to record low on a revenue miss and lowered outlook. Home Depot climbs as it beats expectations.

By Melly Alazraki Aug 14, 2012 9:23AM
Updated at 12:18 p.m. ET

Stocks edged higher Tuesday morning after slightly better-than-expected economic data from Europe and a strong July retail sales report in the U.S. Solid results from several retailers also helped push stocks higher.

The Dow Jones Industrial Average ($INDU) was up 36 points at 13,205. The S&P 500 ($INX) was up 4 points at 1,408. The Nasdaq Composite ($COMPX) was up 7 points at 3,029.

U.S. retail sales increased 0.8% in July, much higher than the 0.2% growth economists had expected. It was the biggest gain in four months and could point to a rebound in consumer spending and higher U.S. GDP growth in the third quarter. Core sales, excluding autos, gasoline and building materials, rose by 0.9% -- the biggest gain since January.

European shares rose after German and French economic growth slowed less than forecast in the second quarter despite a wider regional debt crisis that has dragged several eurozone nations back into recession.

Germany's GDP rose 0.3%. Economists had predicted a 0.2% increase, according to Bloomberg News. French GDP was unchanged, better than the 0.1% decline economists had predicted. The eurozone GDP, however, contracted by 0.2%, dragged down by a 1.2% decline in Portugal and a 0.4% fall in Spain.

After U.S. stocks ended slightly lower Monday on concerns about a global slowdown, some called the gains in world markets Tuesday a relief rally. Others say markets have been generally moving up on hopes for ECB plans to bring stability to the region and intervention by other central banks to address the faltering global growth with new stimulus measures.

That hope might have helped push up oil prices Tuesday, with Brent crude reaching nearly $114 a barrel. U.S. crude stocks data, due later in the day from the American Petroleum Institute, should provide more insight into oil demand growth in the U.S. Stockpiles are forecast to have fallen by 1.6 million barrels last week, declining for a third straight week on lower imports.

Also out this morning were wholesale prices. Produce prices rose a sharper-than-expected 0.3% in July after seasonable adjustments, with food prices rising 0.5% and energy prices falling 0.4%. Economists had expected a 0.2% rise in the PPI. While lower energy prices could help give the economy a boost, the higher core inflation could be a concern for policymakers.

Business inventories -- a key component of GDP -- rose 0.1% in June as car dealers restocked to meet demand. Economists had forecast inventories to rise by 0.2%, according to Reuters. However, business sales fell for the third straight month. At this pace, it would take 1.29 months for businesses to clear shelves, the highest measure for the reading since February 2010.

Groupon (GRPN) shares lost nearly a quarter of their value, plunging to record lows, after the company reported second-quarter results. While profit beat expectations, revenue missed estimates and the daily-deals website forecast for the third quarter was also well below analyst estimates. The company says the forecast is the result of its needing to invest in the business, as well as the economic situation in Europe.

Home Depot (HD) reported a better-than-expected second-quarter profit and raised its fiscal-year earnings guidance Tuesday. Net earnings rose to $1.53 billion, or $1.01 a share, in the quarter from $1.36 billion, or 86 cents a share, a year earlier. Analysts were expecting a profit of 97 cents a share, according to Thomson Reuters.

Pfizer (PFE) cut its full-year profit forecast to reflect the impact of a deal with AstraZeneca (AZN) and said it expects to spend more on research and development. The largest pharmaceutical in the world said it would pay about $250 million to gain access to exclusive global rights for the over-the-counter version of British drugmaker's heartburn pill Nexium.

Michael Kors (KORS) shares rose after the luxury goods retailer said it earned $0.34 per share for its first quarter, well above estimates of $0.20, while revenue also beat consensus forecasts by a wide margin. The company also sees current quarter earnings coming in above Street estimates.

Estee Lauder (EL) reported solid sales across all regions and the quarter's results topped Wall Street expectation. The beauty company also gave a first-quarter outlook and fiscal 2013 revenue forecast above expectations. 

Despite catering to high-end consumers, often considered immune to economic volatility, Saks (SKS) reported a wider fiscal second-quarter loss. The loss, however, was narrower than expected

JDS Uniphase (JDSU) swung to a fiscal third-quarter loss as the broadband-products maker saw a drop in sales in its core businesses. While results were inline with Wall Street's expectations, the company issued a disappointing guidance.

Aug 14, 2012 10:20AM
What's the score? Obama: 200+ fund raisers to keep his job -- 0 Job summit meetings to create new ones for the masses. Kind of says it all don't ya think?
Aug 14, 2012 9:42AM
I'm so sick of all the fear mongering already.  It seems like it's been building for the last 2 years and we're at a fever pitch with 3 months left to go - UGH!

It's just sad, because neither candidate has any hope of winning unless they go negative.  No one in their right mind would ever offer a specific plan at this point, because it would just become fodder for their opponent.  Look at the demagoguery surrounding Ryan's budget plan - that went on for a year, BEFORE he was even on the ticket.

At some point, the American people are going to have to realize the folly of the "lesser of two evils" vote.  They are going to have to realize that voting against a candidate isn't actually possible and that the illusion of doing so is exactly why we always get stuck with politicians instead of representatives.  This is all a direct result of allowing only 2 political parties to control everything. 

At some point, the American people need to start valuing and demanding specific ideas and plans and agendas and strategies from their candidates, and then make their choice based on that information.  When they finally start doing this, it shouldn't take long to get rid of this ridiculous 2-party system.

Imagine what our electoral process would look like if we had 5 major political parties.  There's no way a candidate could be successful by just trying to demonize the other 4 candidates.  Instead, they'd be forced to offer specific plans and ideas and then spend their campaign time and dollars convincing people that their plan was the best one.

Some of you are in favor of term limits.  It's not that hard to win re-election and be a career politician if you only have to face one viable opponent every election cycle.  That would all likely change if you were up against 4 major opponents.

If we had 5 major political parties, we'd be so much less polarized.  Instead of the neanderthal approach of "Side A is good and Side B is bad", it would be much more positive and nuanced.  With 5 major candidates, we'd be much more likely to vote for the one with the best ideas, instead of the candidate that is better at slinging mud.  Ultimately, isn't that what we want, more positive ideas and less negative mud slinging?  As long as 90% of you continue to feed the donkeys and elephants, it will be nothing but slop, as far as the eye can see.
Aug 14, 2012 10:14AM

These finacial idiots dont have a clue!!! One day its the stock fall on growth worries, the next day they rise on a good growth report. If they would look around they would see unemployment at 8.3% and inflation starting to take off. Th is economy sucks no matter how the lib's want to spin it. Gas at $4/gal and food price rising daily. Utilities are out of sight. And the prez is worried how he and Mic-Hell-e look on TV.


Aug 14, 2012 10:26AM
Go to the grocery store or fill up your gas tank.  That's the increase in retail sales.....  The price of a coffee table has been stable for years, to bad that means nothing to a family living pay check to pay check.
Aug 14, 2012 9:59AM

i'm right there ~


it has seemed like sales dropped off a cliff a few months ago.  usually i ship to a few customers each month but the past 3 months i've only had 3 sales to stores restocking their shelves. 


>>>Small biz owners grow more pessimistic in July<<<
Aug 14, 2012 10:53AM

I have a cute story on regulation.Saturday my wife and I decided to walk to the farmers market downtown, our accountant was working a booth for the Lions Club selling pop,hot dogs ,sloppy joes and such for charities.THey  were visited by our local food safety person(on a Saturday ,probably double time in pay) looked in the cooler of pop,noticed pop floating in ice water,made them dump the water because it could contaminate the other soda's . Really? they probably sold a case all day-Is this the job creation we get from government or just another waste of taxpayer money.

Aug 14, 2012 10:17AM
So, Obama will waive immigration law passed by congress but he won't suspend the ethanol (corrected)  mandate. Now THAT is great leadership. 
Aug 14, 2012 9:55AM

feels partially true, but scary when countries like korea have upwards of 50 parties running for a given positon.  we currently have 3 parties if the libertarian is included.  but only the main 2 parties are funded by the big money.  makes one wonder how a 3rd much less 5th party can get into play of the big money isn't funding it. 




>>>>If we had 5 major political parties, we'd be so much less polarized.  Instead of the neanderthal approach of "Side A is good and Side B is bad", it would be much more positive and nuanced. <<<<

Aug 14, 2012 11:15AM
Price of gas shoots up to $4.00 a gallon this month. Next month consumer spending will decrease again. It's not rocket science folks.
Aug 14, 2012 10:06AM
Anybody but Obama on inauguration day, Jan 2013 

Aug 14, 2012 10:26AM
Get ready for WW3 Israel giving the Iranians weeks not months..!
Aug 14, 2012 10:13AM
Oh goody! another 'we're saved' rally! No they are calling this a.....'relief' rally.  WTF
Aug 14, 2012 10:29AM
There are actually two messages here. The 1st is very
interesting, but the 2nd is absolutely astounding - and explains a lot.

A recent "Investor's Business Daily" article provided very
interesting statistics from a survey by the United Nations International
Health Organization.

Percentage of men and women who survived a cancer five years
after diagnosis:

U.S. 65%

England 46%

Canada 42%

Percentage of patients diagnosed with diabetes who received
treatment within six months:

U.S. 93%

England 15%

Canada 43%

Percentage of seniors needing hip replacement who received it
within six months:

U.S. 90%

England 15%

Canada 43%

Percentage referred to a medical specialist who see one within
one month:

U.S. 77%

England 40%

Canada 43%

Number of MRI scanners (a prime diagnostic tool) per million

U.S. 71

England 14

Canada 18

Percentage of seniors (65+), with low income, who say they are
in "excellent health":

U.S. 12%

England 2%

Canada 6%

And now for the last statistic:

National Health Insurance?


England YES

Canada YES

Check this last set of statistics!!

The percentage of each past president's cabinet who had worked
in the private business sector prior to their appointment to the cabinet.
You know what the private business sector is.a real-life business, not a

government job. Here are the percentages

T. Roosevelt................... 38%

Taft................................ 40%

Wilson .......................... 52%

Harding.......................... 49%

Coolidge......................... 48%

Hoover ........................... 42%

F. Roosevelt .................. 50%

Truman........................... 50%

Eisenhower...................... 57%

Kennedy.......................... 30%

Johnson........................... 47%

Nixon............................... 53%

Ford................................. 42%

Carter............................... 32%

Reagan.............................. 56%

GH Bush.......................... 51%

Clinton ............................. 39%

GW Bush........................... 55%

Obama................................ 8%

This helps to explain the incompetence of this administration:
only 8% of them have ever worked in private business!

That's right! Only eight percent---the least, by far, of the
last 19 presidents! And these people are trying to tell our big
corporations how to run their business?

How can the president of a major nation and society, the one
with the most successful economic system in world history, stand and talk
about business when he's never worked for one? Or about jobs when he has
never really had one? And when it's the same for 92% of his senior staff
and closest advisers? They've spent most of their time in academia,
government and/or non-profit jobs or as "community organizers."

Aug 14, 2012 10:11AM
This is good news. Any movement up is good. Europe contracted.
The damper is the corn crop. This will push everything up including gas.

Aug 14, 2012 11:24AM
" I will continue to just laugh in your face when you  frown and say we have an  entitlement and spending problem. "

This is precisely the reaction of most all welfare recipients and other "takers" of unsustainable entitlement programs. In true Orwellian fashion, they are also the first to accuse others of being greedy.
Aug 14, 2012 12:04PM
Back to school sales. It happens every year but the MSM treats it like the "final coming" of our economic turnaround. And yet; a paltry 0.8% increase in retail sales gets the MSM'ers all excited. Americans remember not long ago when this ran 2% or 3% a month.
Aug 14, 2012 10:49AM
All this talk about "helping the poor." Poor old people, poor urban people, poor inner-city people.... But what about the poor children or babies that haven't been born yet? Children don't have a say, yet we are saddling them with hundreds of thousands of dollars of debt before they even get a chance at life. Is that fair? Is that compassion? If debt does not matter, why collect taxes?
Aug 14, 2012 10:00AM
Another day, another 2,345 commercials telling me how much Romney paid in taxes. 
Aug 14, 2012 11:41AM

if july sales are up its due back to kids Going back to school and parents spending the hard earned put back cash, this what made the sales go up, but the people i know and hang out with are not spending money. i wonder how they are gonna spin the august sales pitch, gas prices are already taking a bite out of my spending and the lights and grocery bill are going out of sight. 


i hardly trust any thing that the government is putting out this day and time.

Aug 14, 2012 9:59AM

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.

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