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Rally on 'Less Bad' Data

Bob Pisani is off; this post was written by CNBC producer Robert Hum.

With few earnings and economics reports lately, the markets have been missing any catalysts to spark a move to the upside over the past 1.5 weeks. They are finally getting one today, and that’s leading to a broad-based rally with 8 stocks rising for every 1 that’s down. Asian and European markets as well as U.S. stocks are all rising on “less bad” data this morning.

a) Global inflation around the world (China, U.K., U.S.) continues to be elevated, but the gains came largely inline with economists’ expectations. Still, inflation in China is at a 3-year high, U.K. inflation remains at a 2.5-year high in the U.K., and U.S. inflation is up over 7 percent year-over-year.

b) U.S. retail sales fell for the first time in 11 months, largely due to weakness in auto sales last month. However, the 0.2 percent decline in May retail sales was still smaller than the 0.6 percent decline expected.

China stocks rise 3-5 percent as the country’s central bank raised bank reserve requirements by half a point, the 6th increase this year in continued efforts to contain inflation. Although, industrial production and retail sales in China both rose at a double-digit rate in May, both numbers were down from the prior month, with industrial production sitting at its lowest level since November.

Elsewhere:

1) Best Buy shares jump after the electronics retailer beat estimates ($0.35 vs. $0.33 consensus) on strong double-digit increases in mobile and online sales. Although comps still fell 2.4 percent in the U.S., that was a smaller decline than the Street expected. But the better-than-expected sales came at a cost as margins shrunk, blamed in part on higher promotions to entice shopping. TV, media, and digital imaging sales remained weak.

Guidance for the full year of $3.30-$3.55 is inline with estimates of $3.48. The stock had been hovering a 2.5-year low prior to the earnings release.

2) Avis Budget announced it is buying Avis Europe for $1 billion. That’s raising concerns the U.S. car rental agency will exit out of the bidding war for Dollar Thrifty , which had also received an offer from Hertz . Shares of Avis are rising on the deal, while shares of Hertz are jumping 11 percent and Dollar Thrifty is dropping 9 percent.

3) Nokia rises after settling a patent dispute with Apple . The deal gives the Finnish phone maker an undisclosed amount of continuous royalties and a lump-sum payment. Nokia expects the agreement will have a “positive financial impact” on its Q2 outlook.

4) Presenting at a conference, Foodmaker General Mills reaffirms its full-year earnings of $2.46-$2.48 vs. $2.48 consensus.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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