Stocks continue to march higher, hitting a one and a half year high fueled by strong demand for industrials.

After the first two days of trading this week, the Dow Jones Industrial Average climbed 156 points, or 1.45%, to finish at 10,888.83, the S&P 500 added 14.27 points, or 1.23%, ending at 1,174.17, and the Nasdaq Composite gained 57 points, or 2.42%, to settle at 2,415.24.

Health care stocks were a laggard on Tuesday, but still posted another day in the green after President Obama signed a sweeping reform bill into law. Materials joined industrials as a market leader thanks to stabilizing gold, silver, and copper prices. Gold climbed 0.5% to settle at $1,105.20/troy oz, silver added 0.6% ending at $17.04/troy oz, and copper tacked on 0.25 to finish at $3.389/lb.

The resurgent residential real estate market may be showing signs of slowing after the latest existing home sales report. February sales slumped 0.6% compared with January, leading to a sharp increase in seasonal supply. On Tuesday, the FHFA reported seasonally adjusted home prices for federal agency sponsored mortgages declined 0.6% in January, on top of a 2% decrease for December. Although the buyer market does not appear to have been exhausted, federal stimulus and extraordinarily low rates can only prop up the market for so long. Wednesday’s new home sales report should provide further illumination.

Looking ahead, Wall Street will shift its focus from Washington to housing and GDP data, along with key earnings reports due up from Oracle and Best Buy.

Macroeconomic data due up this week:

Wednesday – New home sales (February), durable goods orders (February), oil inventories (Weekly)

Thursday – Jobless claims (Weekly), Federal Reserve balance sheet, money supply

Friday – GDP (Q4), Consumer Sentiment (March)

On the one-year anniversary of the major indices hitting a 12-year low, the markets remained subdued, as a lack of economic news and corporate earnings to start the week have kept the markets in check.
In corporate news, one of the largest grocery retailers in the U.S., Kroger Co. (KR) made it known prior to the opening bell this morning that the company’s earnings slipped during the 4Q, despite an increase in overall sales totals.
For the quarter, Kroger posted a net profit of $255.4M, or $0.39 per share, compared to a profit of $349.2M, or $0.53 per share, from a year ago, a decrease in net income of nearly 27% year-over-year. Quarterly sales advanced for the grocer, climbing from $17.31B to $18.56B, a jump in revenues of more than 7%.
On average, analysts within the industry were looking for the Ohio-based grocery retailer to post a quarterly profit of $0.34 per share based on total revenues of $17.73B.
During the period, Kroger reported charges related to advertising, warehousing and transportation of $14.38B, up 10% from last year’s tally of $13.09B. However, the company did benefit from a lower LIFO charges, declining from $40.9M a year ago to $1.3M.
David B. Dillon, Kroger’s Chairman and CEO, remarked on the company’s recent performance report, “We are strengthening Kroger’s overall competitive position by increasing the number of households that are loyal to Kroger and earning a greater share of their business.”
For the year, Kroger managed to post an annual profit of $70M, or $0.11 per share, a far cry from last year’s yearly total of $1.25B in earnings, or $1.89 per share. This year’s tally was greatly affected by a $1.05B charge related to write-downs concerning the company’s California-based Ralph’s grocery stores. Excluding the write-off, Kroger would have posted a yearly profit of $1.12B, or $1.71 per share.
Looking ahead to 2010, the company is anticipating full-year earnings to come in between $1.60 and $1.80 per share. Analysts, on the other hand, are projecting Kroger to record a yearly profit between $1.70 and $2.02 per share, with a general consensus of $1.79 per share.
By the sound of the closing bell on March 9, shares of Kroger were trading in the red, giving up $0.55, or 2.4%, to end the session at $22.35 per share. Throughout the past year, shares of KR have traded within a narrow range, reaching a high of $24.80 per share and a low of $19.39 per share.
Operating as one of the leading full-line sporting goods retailer in the U.S., Dick’s Sporting Goods Inc. (DKS) revealed early Tuesday morning that the company recorded a solid profit during the most recent quarter, helped by higher sales.
Reporting for the 4Q, Dick’s booked a net profit of $67.4M, or $0.56 per share, in sharp contrast to last year’s net loss of $105.6M, or $0.94 per share. Last year’s loss was attributed to Dick’s incurring hefty acquisition and integration costs. Sales advanced year-over-year as well, climbing from $1.21B a year ago to $1.34B, an increase in revenues of almost 11%. Additionally, sales recorded at stores open at least one year saw an increase in sales of 2.5% over last year’s totals.
Analysts within the industry were looking for the sporting goods retailer to post a quarterly profit of $0.55 per share based on $1.3B in total sales.
Chairman and CEO, Edward Stack, remarked, “Despite the difficult economic environment of 2009, our associates successfully generated more sales, effectively managed inventory levels, and continued to exercise financial discipline. As a result, we generated higher profits, leveraged expenses, further strengthened our balance sheet and believe we gained market share in 2009.”
For fiscal 2009, Dick’s recorded net income of $135.36M, or $1.15 per share, versus a net loss of $39.87M, or $0.36 per share in 2008. Yearly revenues increased as well, advancing from $4.13B a year ago to $4.41B, a jump in sales of nearly 7%. Analysts were predicting a yearly profit of $1.18 per share on $4.37B from Dick’s.
As for the upcoming year, Dick’s is looking to post a 1Q profit between $0.12 and $0.13 per share, while analysts are predicting a profit of $0.13 per share. For the year, Dick’s is looking to record a profit between $1.32 and $1.35 per share, with analysts expecting $1.32 per share.
Stack later added.”Looking to 2010, we expect to generate double-digit earnings growth and positive operating cash flow while further investing in the long-term growth of the company.”
With the day’s trading complete, shares of DKS were down nearly 1%, losing $0.17 to end the session at $25.45 per share. Throughout the past year, the stock has managed to trade as high as $26.28 per share, while dipping to an annual low of $10.26 per share.
Reporting prior to the start of trading on March 9 was Superior Well Services, Inc. (SWSI), a growing oilfield services company operating in many of the major oil and natural gas producing regions of the U.S. The company’s announcement early Tuesday showed a quarterly loss driven by increased costs and lack-luster sales totals.
For the 4Q, Superior Well Services posted a net loss of $16M, or $0.58 per share, compared to a net profit of $11.8M, or $0.48 per share from a year ago. The lack of revenues played a big part in the company’s dismal performance, as revenues fell more than 40%, from $161,7M last year to $95.9M.
Analysts, on average, were looking for the oil field service company to post a quarterly loss of $0.38 per share based on $94M in overall revenues.
For fiscal 2009, Superior recorded a net loss of $82.6M, or $3.39 per share, well below the previous year’s net profit of $38.7M, or $1.64 per share. Revenues for the year receded as well, falling more than 23% year-over-year to $399.5M. Analysts had predicted a net annual loss for Superior of $2.33 per share based on $398.1M in total sales.
As the markets conclude trading, shares of SWSI were down more than 4% on the day, giving up $0.85 to end the session at $17.11 per share. Within the past year, the stock has fallen to an annual low of $4.11 per share, while reaching a 52-week high of $18.75 per share.
Energy prices reversed their upward trend on Tuesday, curtailing a month-long run in oil prices as a stronger Dollar pushed prices lower. By the close of trading, the price for a barrel of light, sweet crude for April delivery slipped $0.38 to settle at $81.49. The current contract added $0.37 to settle at $81.87 a barrel on Monday.
In additional NYMEX trading, heating oil slipped $0.0157 at $2.0898 a gallon, while gasoline fell $0.0289 to $2.2603 a gallon. April natural gas futures dropped $0.011 to $4.516 per 1,000 cubic feet.
Despite a strengthening Dollar, Treasury prices were higher Tuesday. With the day’s trading complete, the benchmark 10-year note was higher, adding 3/32 to 99 13/32, with a yield of 3.69%, down 0.01% from the day before.
The longer maturing 30-year note was up on the day as well, gaining 6/32 to 99 5/32, as its yield declined to 4.67% from the previous session’s 4.68%. Lastly, the shorter maturing 2-year note was marginally higher, adding 1/32 to 99 31/32, while its yield decreased by 0.02% to 0.87%.
The Forex markets saw the Dollar trade higher versus the majority of the world’s currencies, as the 16-nation Euro declined against the greenback, buying $1.3601, lower than the previous session’s price of $1.3633. The British pound also decreased versus the Dollar, as the Sterling slipped from $1.5072 to $1.4998.
However, the Dollar did decrease in value against the Japanese yen, buying 89.95, down from Monday’s value of 90.25. In additional trading, the Dollar climbed to 1.0751 Swiss francs from 1.0736 but slipped to 1.0261 Canadian dollars from 1.0277 Canadian dollars.
By the sound of the closing bell on March 9, the Dow Jones Industrial average added 11.86 points, or 0.1%, to end the day at 10,564.38, while the broader market indicators concluded the session in the green as well.
The S&P 500 index was higher, gaining 1.95 point, or 0.2%, to finish at 1,140.44, while the tech-heavy NASDAQ composite index advanced as well, adding 8.47 points, or 0.4%, to 2,340.68.

Stocks traded lower last week as a stream of downbeat news rekindled concerns about the global recovery, highlighted by disappointing reports for jobless claims and the housing industry.

The Dow fell 77.09 points, or 0.7%, to close at 10,325.26, the S&P slipped 4.68 points, or 0.4%, ending at 1,104.49, and the NASDAQ declined by 5.61 points, or 0.3%, to close at 2,238.26.

The weekly report of the number of initial claims filed for the week ending February 20 showed an increase of 22K claims to a seasonally adjusted rate of 496K. The unexpected gain in filings came in well ahead of the predicted decrease in claims of 455K. In addition, those continuing to receive benefits remained relatively unchanged at 4.6M.

As the housing industry continues to struggle, sales of new homes retreated to a new record low in January. Sales dropped 11.2% to a seasonally adjusted rate of 309K units. The recent decline brought new home sales to its lowest reading in more than 25 years. Economists were looking for new home sales to increase by 5%.

With huge declines throughout the U.S., the only region to post a gain in home sales was the Midwest, where sales increased by 2.1%. The decrease in sales pushed the median selling price for homes down to just over $203K. That figure comes in 5.6% lower than December’s price of more than $215K per house, while remaining 2.4% off last year’s prices.

For 2009, new home sales plummeted nearly 23% to 374K units, marking the worst year on record. Analysts within the industry predict new home sales to eclipse the 500K mark in 2010, albeit well below the record pace set between 2003 and 2006 when annual sales were well above 1M units per year.

Meanwhile, the number of previously owned homes that were sold throughout January slipped 7.2% to a seasonally adjusted rate of 5.05M units. The recent reading marked the second straight month of hefty declines, falling to its lowest level since last summer. Economists were predicting existing home sales would increase at a pace of 5.5M units. The median home price remained unchanged from a year ago, as it sits just under $165K and is down 3.4% from December’s prices.

Another report pertaining to the housing industry came from the Federal Housing Finance Agency (FHFA), which revealed that home prices fell 1.6% across the board in December. For 2009, sales slipped 1.5% on a national basis, despite several regions throughout the U.S. posting increases for the first time in several months.

On the bright side, as factories begin to rebuild inventories of goods for businesses that had let their stockpiles dwindle to save cash, orders for durable goods skyrocketed in January by 3%. That was the largest increase since a 5.8% surge last July. The increase in orders came primarily from strong demand for commercial aircraft, which posted a 126% gain. Excluding transportation, durable orders declined by 0.6%, a weaker showing than what economists had anticipated.

Also, the U.S. economy propelled itself forward at a 5.9% clip in Q4 of 2009, stronger than 5.7% growth that was initially estimated. The current reading marked the strongest expansion in more than six years. The growth was attributed to an 18.2% surge in equipment and software spending, while exports posted a 22.4% surge, its highest rate in more than 13 years.

For the current year, analysts believe that the economy will expand at a 3.1% pace. That would be a much-improved showing over 2009’s results, in which the economy contracted at a 2.4% clip, its worst showing since 1946.

A report from the Office of Thrift Supervision revealed the country’s thrifts, also known as savings and loans, posted a $29M profit in 2009. That is a welcomed sign, especially after recording consecutive losses of $15.9B and $649M in 2008 and 2007 respectively. It was the industry’s first profit since 2006.

The week ahead features the Unemployment report for February which is due out on Friday. Personal Income, Personal Spending, Core PCE Prices, Construction Spending, Factory Orders, Pending Home Sales and Consumer Credit reports for January are due out as well, along with the ISM Index, Auto/Truck Sales, Challenger Job Cuts, ADP Employment Change, ISM Services, Unit Labor Costs, revised Productivity reports for Q4, weekly results for Initial Claims and Crude Inventories, and the Fed’s Beige Book reading for March.

Stocks held onto early week gains after stumbling into the weekend in the wake of the Federal Reserve’s move to increase the discount rate 25 basis points to 0.75%. Markets rallied despite mixed earnings reports thanks to several encouraging economic reports.

The Dow climbed 303.21 points, or 3.0%, to close at 10,402.35. The S&P rose 33.66 points, or 3.1%, ending at 1,109.17. The NASDAQ gained 60.34 points, or 2.8%, to close at 2,243.87.

On the housing front, construction of new homes surged 2.8% in January to a seasonally adjusted rate of 591K units. The recent reading was well ahead of the 580K economists were anticipating and the highest level reached in the past six months. Still, applications for building permits slipped 4.9% during the month to a rate of 621K. Permits, which are considered a good indicator of future activity, posted its first decline in the past three months.

The nation’s industrial production advanced in January, climbing 0.9%, marking the seventh straight month of expansion. There was growing progress in the country’s manufacturing, mining and energy utilities, marking the first time since August 2009 that all three major categories posted gains.

During the month, manufacturing increased by 1%, while mining and utilities each gained 0.7%. January’s results were a welcome sign after mining activity fell 0.2% and manufacturing slipped 0.1% in December. The nation’s industries were operating at 72.6% of capacity in January, a 0.7% increase from December.

The Labor Department released a report last week showing that import prices jumped 1.4% in January, much higher than the revised 0.2% gain recorded in December. On a year-over-year basis, import prices have surged 11.5%.

The advance in import prices was a direct result of imported fuel, which saw prices jump 5.3% following a 0.6% decrease in December. Import fuel prices were greatly affected by a 4.8% increase in petroleum prices and an 18.8% gain in natural gas prices.

The report showed that export prices increased for the third consecutive month as prices rose by 0.8% in January. That followed a 0.6% increase the month before. The increase in export prices was due in large part to a 1.4% jump in agriculture prices. Compared to this time last year, export prices have increased by 3.4%.

Wholesale prices more than doubled in January, igniting worries about price increases. For the month, the Producer Price Index jumped 1.4%, doubling the 0.7% gain economists had predicted. The gains in prices were lead by a surge in costs for gasoline and other energy goods.

Excluding food and energy costs, the core inflation rate at the wholesale level advanced by 0.3%, tripling the 0.1% gain economists were projecting. Throughout the past year, wholesale prices were up 4.6%, while core prices were up a more modest 1%.

Yet inflationary fears eased after the CPI report. Consumer prices advanced at a slower-than-anticipated rate in January as the CPI rose 0.2%, while core inflation, those prices excluding food and energy costs, decreased by a modest 0.1%. It was the first time in more than 25 years that core prices dropped.

The 0.2% gain in overall prices was a direct result of a 2.8% jump in energy costs, lead by a 4.4% jump in gasoline prices and a 3.5% increase in natural gas charges. The nearly 3% surge in energy prices was the highest since last August.

With Greece’s debt problems at the forefront of market activity over the past few weeks, the U.S. debt load has come under increasing scrutiny. After the first four months of the fiscal year, the nation’s annual budget is currently running at an elevated rate. In January, the deficit totaled $42.6B, which pushed the budget into the red at $430.7B, 8.8% higher compared to the same period a year ago. President Obama announced during the week that this year’s deficit would hit $1.56 trillion and would most likely remain above the $1 trillion mark for the next three years.

The labor market remains a major source of concern for the U.S. Weekly data showed that the number of newly unemployed workers for the week ending February 13 advanced unexpectedly, increasing by 31K claims to a seasonally adjusted rate of 473K.

A forecast of future economic activity advanced for a 10th consecutive month in January as the index of leading economic indicators climbed 0.3%. The current reading comes in much weaker than the 1.2% rise in December and well short of the 0.5% gain that economists had expected. With the continued recovery within the nation’s manufacturing industry and a surge in the stock market, the index has steadily increased for nearly a year.

Data due up this week includes New Home Sales, Existing Home Sales, and the Durable Orders reports for January. Also, the second estimate readings for GDP for the fourth quarter, the Case-Shiller 20-city Index and the FHFA Housing Price Index for December is due out, along with Consumer Confidence, the Chicago PMI and the final reading for the Michigan Consumer Sentiment report for February. Weekly results for Initial Claims and Crude Inventories are scheduled as always.

The markets fluctuated erratically throughout last week’s trading, posting triple-digit gains and losses. The week’s highs and lows were attributed to investors taking heed of economic news that influenced sentiment throughout the sessions. Adding to the indecision was news from Fed Chairman Ben Bernanke, who revealed plans on how to reduce the need of financial stimulus to the central banking system.

The nation’s trade deficit expanded at a much faster than expected pace in December, as the imbalance came in at $40.2B, an increase of more than 10% from November’s reading and the largest disparity in the past year. Expediting the surge was the country’s increased demand for oil and additional imports. Economists were looking for the deficit to come in around $36B.

Looking further inside the report, exports of goods and services advanced for an eighth consecutive month, increasing 3.3% to $142.7B, while imports expanded 4.8% during the month to, $182.9B. Imports were led by a 14.8% jump in oil imports, leading to its highest level since October 2008. By the end of 2009, the U.S. deficit receded to $380.7B, more than $315B less than the $695.9B deficit for 2008.

A report from the Labor Department revealed that the number of recently out-of-work employees declined more than anticipated for the week ending February 6. Surprisingly, initial claims fell by 43K claims to a seasonally adjusted rate of 440K. Economists were looking for first time filings to decline at much slower pace of 15K.

Initial claims are now approaching their lowest levels, which were established last December, when claims dropped to their lowest point in almost 18 months. Last week, the unemployment rate slipped to 9.7%. The drop was aided by the number of continuing claims decreasing by 80K, to an adjusted rate of 4.5M. Additionally, there were nearly 5.7M people receiving extended benefits in the week ending January 23, down from nearly 5.9M the previous week.

The National Association of Realtors announced last week that the median price, for existing homes sold, increased in 67 out of 151 metropolitan cities during the 4Q. With 40% of U.S. cities showing price improvements, that is a sharp improvement from the 3Q, when prices increased in only 20% of the cities surveyed. For the quarter, the national median price for existing homes was almost $173K, 4.1% below the same period from a year ago.

Representing nearly 70% of all economic activity, consumer spending plays a key role in the nation’s health. With that, the Commerce Department revealed that retail sales recorded a better-than-expected jump in January of 0.5%, the best showing since a 2% jump in November. The increase in sales was also better than the 0.3% gain economists had anticipated. Excluding the sale of autos, sales advanced at a 0.6% clip, also better than expected.

America’s businesses cut its stockpiles during December, as inventories were reduced by 0.2%, the opposite of the 0.2% gain economists were looking for. The back-and-forth between monthly gains and losses produced cautious behaviors from businesses as the strength and durability of the economic recovery remains in question. However, overall business sales rose 0.9% in December following a 2.4% surge in November.

The week ahead will see a handful of economic data released that will include the Treasury Budget, Building Permits, Import/Export Prices, Housing Starts, Capacity Utilization, Industrial Production, PPI, Leading Indicators and CPI reports for January.

The upcoming week will also include the Philadelphia Fed report for February, as well as weekly results for Initial Claims and Crude Inventories.

The DOW closed the week higher, climbing 86.91 points, or 0.9%, to close at 10,099.14. The S&P also finished the week in the green, rising 9.32 points, or 0.9%, ending at 1,075.50. The NASDAQ concluded the week up, gaining 42.46 points, or 1.9%, to close at 2,183.58.