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Bulls Make Their Run

Published: Thursday, 7 May 2009 | 9:40 AM ET

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By: Bob Pisani
Reporter

The rally continues.

Bulls are arguing this morning that today's data supports the current rally:

1) The stress test indicates banks in the aggregate need to raise less capital than bears expected.

2) Retail sales are much better than expected.

3) The Bank of England left interest rates unchanged at .5% but increased the size of their asset purchases to $125 billion from $50 billion.

The S&P 500 is up about 5 percent this week, and futures are up again this morning.

Elsewhere:

April retail same-store sales are not only better than expected in aggregate, but many companies are raising guidance:

1) Wal-Mart up 4 percent pre-open, sales up 5 percent, vs. 2.9 percent Street was expecting. Wal-Mart stopped giving sales guidance several months ago; now they will no longer provide monthly same store sales results.

Talk about rotation: while Wal-Mart was a monster outperformer last year and most of this year, it has been the worst performer in the Dow since the March 9th bottom.

2) Target sales up 0.3 percent on fewer markdowns, but first quarter earnings will be well above expectations.

3) Gap reported a smaller than expected decline in sales and is guiding higher;

4) JC Penney's and Kohl's raised guidance

5) Macys had a slightly bigger than expected decline in sales but is saying they will have a smaller than expected loss than expected for the quarter;

6) Aeropostale reported much better than expected sales (up 20 percent vs. 9.7 percent expected) and is guiding higher;

7) Gymboree had a smaller than expected decline and is guiding higher for the quarter;

8) TJX reported a gain in sales, better than the loss expected, and is guiding much higher.

9) BJ's Wholesale reported loss slightly greater than expected but they too are guiding much higher.

RETAIL STOCKS

Elsewhere:

1) Prepared foods maker Sara Lee trades up 5 percent pre-open after its Q3 earnings beat estimates. Earnings overall fell 22% from a year ago as margins contracted amid a 6.1 percent decline in North American retail volumes. For the year, it guides mostly above the consensus forecast.

2) Shares of Prudential Financial are rising nearly 7 percent pre-open as results topped Wall Street forecasts. Investment losses at its financial services operations continued to hurt the bottom line. The company cut its full-year earnings forecast, but the new guidance fell inline with analyst expectations.

3) Oil & gas producer Anadarko Petroleum reported a smaller-than-expected loss in the first quarter. Revenues fell 46 percent on lower oil prices and weaker demand. U.S. oil sales volumes fell 16 percent in the quarter.

EARNINGS CENTRAL

SLE

PRU

APC

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