Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Pre-Market Primer: Wal-Mart US Sales Drop; Jobless Claims Continue to Slide

By

Cisco is still struggling to keep up with the trend toward cloud computing.

PrintPRINT
Stocks are heading lower this morning as economic reports show that inflation is still tame and Wal-Mart (NYSE:WMT) booked a rare dip in US sales.

The Consumer Price Index showed that inflation was subdued in July. After prices jumped 0.5% in June, the cost of major consumer goods rose just 0.2% last month. Even excluding food and energy costs, prices rose 0.2% for a second straight month.

Initial claims for unemployment insurance fell by 15,000 last week to 320,000. Economists expected 330,000 unemployment filings. The four-week moving average of claims fell to a fresh post-recession low of 332,000.

The New York Fed's Empire State Manufacturing Survey's unexpectedly fell 1.22 points to 8.24 this month. Economists thought that the index of general business conditions would rise slightly to 10.

More key economic data is due out later today. Industrial production and manufacturing are both expected to show a 0.3% rise in July. The capacity utilization rate is likely to have ticked up just one-tenth of a percentage point to 77.9% The Philadelphia Federal Reserve will also publish its survey of general business conditions in the in its region. The index is forecast to fall 4.8 points to 15 this month.

Wal-Mart shares plunged 2.7% this morning after reporting a fall in US sales and slashing its outlook. Same-store sales fell 0.3% in the fiscal second quarter, missing estimates of a 0.7% gain. Adjusted earnings pre share grew 1.3% from the year before to $1.24 per share and revenue increased 2.3% to $116.95 billion. The world's largest retailer missed analyst estimates on the top and bottom lines. The company also lowered its full-year profit outlook by a dime to $5.10 to $5.30 per share as it contends with a higher payroll tax and persistently high unemployment.

Kohl's Corporation (NYSE:KSS), a much smaller rival retailer, said that second-quarter earnings fell 3.5% to $1.04 per share from $1.00 a year earlier as costs rose. Revenue increased 2% to $4.29 billion. Though the company lowered its full-year guidance, shares rose 1.79% in the pre-market.

Cisco (NASDAQ:CSCO), the biggest networking software and services company, announced yesterday that it will slash 5% of its workforce though its second quarter profit was better than expected. Cisco earned $0.42 per share, up from $0.36 per share a year earlier. Revenue rose 6% to $12.42 billion. Cisco will also let go of 4,000 workers, mostly in middle management, to trim costs as it contends with the market's shift to cloud computing. Shares of Cisco dropped 8.4% in after-hours trading.

US stock index futures are slightly lower this morning. Dow (INDEXDJX:.DJI) futures were down 0.59% to 15,214 while futures contracts on the S&P 500 (INDEXSP:.INX) slipped 0.59% to 1,672.00. Nasdaq (INDEXNASDAQ:.IXIC) futures also sank 0.71% to 3,101.00.

Overseas stock markets are also in the red. Japan's finance minister said that lowering the corporate tax rate is not a major priority for the government, but he did suggest that tax incentives for capital investment could be in the cards. In the UK, retail sales rose 1.1% in July, beating economists' estimates.

Twitter: @vincent_trivett
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE