Before The Bell: Weak Shield in Sears, Philips Lightens Up
Shield surprises on the downside. Philips makes a bold statement. Futures are lower.
Sears (SHLD) reported 3Q EPS of $0.01 vs. estimates of $0.50; revenues fell 3.4% year-over-year to $11.5 bln vs. $11.61 bln consensus. Bloomberg reports the performance marks the first consecutive quarterly decline since Chairman Eddie Lampert merged Sears and K-Mart in 2005. Sears CEO Aylwin Lewis said "We cannot blame our results entirely on the retail and macro- economic environments. We have much on which to improve.'' Professor Adam Warner mentioned Sears in Doin' It Bloggystyle. Also read Professor Quint Tatro's Seven Things to Look For In Fundamentals Trading.
From the Bull Pen: Bullish plays in retail may include Gap (GPS); sell-stops below $19.
From the Bear Cave: Professor Jeff Macke mentioned Sears as a train wreck in a recent article. "It does suggest the limits of the 'ride along with the genius trade," he wrote with respect to Eddie Lampert. Those still bearish SHLD may roll buy-stops down to $112.50 and, if broken, $107 (recent lows).
Philips Brightens Up
Reuters reported Philips Electronics (PHG) agreed to buy U.S. lighting maker Genlyte Group (GLYT) for $2.7 bln. The deal, announced yesterday, would make Philips the top lighting company in North America strengthening its footing against rival General Electric (GE). In a statement Philips said that it does not expect to be hurt by a downturn in the residential housing markets as the company continues to focus on non-residential areas which are expected to continue growing. Professor Guy Adami mentioned this story in Lighting It Up With Acuity.
From the Bull Pen: Professor Adami mentioned another similar lighting play in Acuity (AYI) as it attempts to break out through $40; near-term sell-stops may be set below the 20-DMA ($37.88).
From the Bear Cave: Bears may use yesterday's strength as an entry-point to fade (read: sell) General Electric. Buy-stops may be placed above the 50-DMA ($40.18).
Click on Minyanville's Stocks To Watch for more company-specific ideas.
Quick Check Around the World
Asian trading closed skewed to the upside with the Hang Seng +4.06%, Nikkei +2.38%, Sensex +0.34%, Taiwan +2.06% and Shanghai +4.16%.
A quick check of Europe finds the CAC -0.14%, DAX +0.21%, FTSE -0.36%, ATX -0.57%, Swiss Mkt. +0.21% and Stockholm +0.01%.
A Look At Commodities
Crude oil is trading higher 2.30 to$92.92. Gold is also higher by 2.0 to 809.30. Silver is lower by -0.018 to 14.515, and copper is up 7.85 to 311.25.
As of 8:45AM, S&P Futures are down by 4.1 points and Nasdaq futures are lower by 5.5 points.
On the Radar
8:30 GDP-Prel: 4.8% cons
8:30 Chain Deflator: 0.8% cons
8:30 Initial Claims: 330 k prev.
10:00 New Home Sales: 750 k cons
Click here for the full trading radar.
Good luck, Minyans! Have a great day!
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