Welcome to the end of the third quarter. U.S. tocks are up for the third day in a row as the major indices trim their September losses.
The Dow Jones Industrial Average is rising by 106 points to 18,250, the S&P 500 is rising by 10 points to 2,161 and the Nasdaq is higher by 19 points to trade at 5,288. The S&P Retail ETF is adding 23 cents to sell at $43.14.
“We’ve already seen in the past couple of weeks, competitors, peers getting panicked and starting their mid-season sale before the season even started,” Nils Vinge, head of investor relations, said the company’s earnings call, “So that puts another pressure on us and the industry.” The company also complained of a lack of compelling fashion trends to boost consumer shopping.
Guggenheim initiated coverage of Macy’s Inc. with a buy rating and a $45 price target. The stock rose 2 percent this morning to $36.77. Guggenheim said Macy’s has a healthy balance sheet and a 4.2 percent dividend yield and strong cash flow. On the other hand, Credit Suisse downgraded Macy’s to neutral from overweight and gave it a $40 price target. They think it’s too early to start betting on Macy’s turnaround. They are underweight the overall department store sector.
Wal-Mart Stores Inc. was initiated with an overweight rating from KeyBanc Capital Markets and a $90 price target. The analysts based its rating on market share gains that the retailer had made over the past few quarters. They wrote, “We think that the company can opportunistically use price investments as a lever to drive the targeted incremental $45 billion to $60 billion in sales over a three-year period.” Wal-Mart stock rose over 1 percent to $71.80.
The Bon-Ton Stores, Inc. redeemed the entirety of its outstanding 10 5/8 percent second lien senior secured notes due 2017. The notes were set to mature July 2017 and chief financial officer Nancy Walsh said she was pleased that the company was repaying the notes well in advance of the due date. The stock rose almost 2 percent to sell at $1.70.
In Europe, Hennes & Mauritz AB complained that the extended summer caused a slow start to the fall season and so the stock is falling over 3 percent to 241.20 kronor, or $28.10. H&M reported that its third quarter earnings missed analyst expectations. Net profits fell 9 percent to 6.3 billion kronor, or $739 million, from 6.94 billion kronor last year. Net sales increased 6.4 percent to 48.98 billion kronor, or $5.79 billion. H&M said it may need to cut prices in the fourth quarter as a result of the weak season.