Stocks opened lower as the producer price index rose for the third straight month in July, although slightly less than June. Prices rose 0.2 percent in July, but stripping out energy and foods, they rose 0.3 percent. Prices rose 0.4 percent in June. Prices for goods are dropping, while prices for services are rising.
It’s been a roller coaster week for stocks with the yuan devaluation and retailers reporting disappointing results. But the market could close flat to slightly higher as retailers today bucked the trend and delivered better-than-expected results.
J.C. Penney stock jumped over 8.5 percent to $8.75 after the retailer reported a smaller than expected loss for its second quarter. Penney’s reported that its earnings per share came in at negative 45 cents a share, or $138 million, which was better than the anticipated negative 48 cents per share. Last year the discount retailer experienced a loss of 56 cents per share for the same period. Sales at existing stores rose 4.1 percent, also better than the analyst estimates of 3.9 percent.
Penney’s said its growth came from its Sephora division that enjoyed double-digit increases in same store sales. The men’s, home and fine jewelry division also did well. Penney’s raised its guidance to full year earnings of $620 million, higher than the previous guidance of $600 million. The stock is still down 15 percent for the past year, but the troubled retailer has been clawing its way back up the charts. Year-to-date the stock is up 24 percent.
Nordstrom stock is also performing well in early trading, moving higher by 4.7 percent to $78.48. Nordstrom’s beat bottom line estimates and raised its outlook for fiscal year 2016. Total company sales reached $3.6 billion for the quarter ended Aug. 1, which was a 9.2 percent increase compared with net sales of $3.3 billion during the same period in fiscal 2014. Total comparable sales for the second quarter increased 4.9 percent. Last year, Nordstrom generated $13.8 billion in revenues. Nordstrom’s seems to be succeeding as other department stores struggle to find their way.
Internationally, China seems to have quieted down with regards to its currency the yuan. The Greek parliament approved the conditions required for the bailout package of 85 billion euro. The European indices all traded lower with the French CAC dropping the most at 0.6 percent. French and German banks were dragging down both markets.