Friday, August 17, 2012

Stocks up slightly on strong retail results

by Joshua Freed - Aug. 17, 2012 08:56 AM
Associated Press

NEW YORK - Stocks rose slightly on Friday after strong earnings from retailers boosted investor confidence.

The Dow Jones industrial average rose 13 points to 13,263. The Standard & Poor's 500 index gained 1.2 points to 1,417. And the Nasdaq rose six points to 3,068.

Investors liked what they heard from retailers, who reported strong second-quarter earnings -- and positive outlooks. Gap Inc. shares rose 4.6 percent after it boosted its outlook and posted a 29 percent jump in net income, suggesting the operator of Gap, Old Navy and Banana Republic stores is finally on the way to a turnaround.

Shares of Ann Inc., the parent of retailer Ann Taylor, jumped 19 percent after its second-quarter profit rose 24 percent. Foot Locker rose 2 percent after quarterly profits leaped 59 percent, boosted by higher sales, cost controls and a small tax-related gain.

A few other retailers continued to struggle. Sears Holdings Corp. fell 2.1 percent after it failed to stop a decline in sales.

Facebook Inc. shares continued to fall, dropping another 80 cents, or 4 percent, to $19.07. After debuting at $38 per share, the stock's decline continued on Thursday as some of its early investors got their first chance to sell.

Apple hit a new high, up 1 percent to $642.83.

Broader categories of stocks were mixed. Of the 10 industry groups in the S&P 500, four were down. Retail sales boosted consumer discretionary stocks 0.3 percent.

The biggest decliner was health care, down 0.7 percent as pharmaceutical companies declined. Pfizer fell 1 percent, and Merck dropped 1.7 percent.

Computer chip maker Marvell Technology Group Ltd. saw its stock drop 16 percent after a revenue decline sliced its quarterly net income by more than half. Its CEO cited a slowing economy for the trouble.

Global markets edged higher after German Chancellor Angela Merkel gave a new pledge of support for the euro. On Thursday she said that "we feel committed to do everything we can to maintain the common currency." Germany is Europe's economic powerhouse, so its support is critical to the euro's survival.

Source: http://www.azcentral.com/business/articles/2012/08/17/20120817stocks-up-slightly-strong-retail-results.html

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