Bob Pisani is off; this post was written by CNBC producer Robert Hum.
Not surprisingly, the ECB raised its interest rates by 25 basis points to 1.25 percent. On that announcement, European banks continue to rise, with many up 2 percent this morning. ECB President Jean-Claude Trichet did note at his press conference that the ECB did not decide if this rate hike was a “first of a series.”
Meanwhile, the Labor Department reported initial jobless claims fell 10,000 to 382,000 — largely inline with the 385,000 expected by economists. Futures moved little on that data point.
But traders are eyeing the flurry of March retail sales reports this morning. Although analysts had expected small declines on the month due to colder weather around the country and a late Easter this year, the retail numbers were largely better-than-expected, in the end turning in a gain of 2.2 percent (!), according to Retail Metrics. March was the 19th straight month of positive comps for retailers.
Strong double-digit gains were turned in at Limited Brands (LTD) (up 14.0 percent), Costco (COST) (up 13.0 percent), and Saks (SKS) (up 11.1 percent). In addition, other retailers including Buckle (BKE), Nordstrom (JWN), BJ’s Wholesale (BJ) all handily beat estimates with their modest gains. Even in the absence of much earnings guidance, many of these retailers are seeing their shares rise 2 percent-3 percent in early trading on these sales results.
But take a look at Macy’s (M), which could be representative of what’s to come for retailers — survive a challenging March, and gain momentum in April, when warmer weather and later Easter shopping will likely help traffic. Although Macy’s March comps were just up 0.9 percent, that was better than the 2.9 percent decline that was expected. However, shares of Macy’s are rising 2.5 percent on its outlook for April. Comps for this month are now seen up 8.9 percent, causing the department store to raise its March/April comps forecast to up 4.0 to 4.5 percent from its earlier forecast of up 3.0 percent.
The one big retail disappointment. Shares of Gap (GPS) fall 4 percent after the apparel retailer reported a 10 percent drop in March comps. The company cited the Japan earthquake for some of the weakness, noting the quake will have $0.04 negative impact on Q1 EPS, with earnings now expected to be below Street estimates of $0.44. But don’t kid yourself, sales were horrible across the board in North America: Old Navy down 12 percent, Gap brand down 9 percent, and Banana Republic down 8 percent.
a) Pier 1 Imports (PIR) jumps 8 percent after beating Q4 estimates by a penny. Results were helped by a strong 8.9 percent rise in same-store sales and by improving margins from lower markdowns in the quarter. Q4 comps were boosted by an impressing 11.3 percent rise in March comps – and that was after a 19 percent rise in last year’s March comps.
b) Rite Aid (RAD) reported a Q4 loss of $0.24, inline with estimates despite a 0.9 percent rise in comps. That trend will continue this year as the drugstore chain sees a loss of $0.42-$0.64 (vs. a loss of $0.49 consensus) – even though sales are expected to rise 0.5 percent-2.0 percent.
But don’t be fooled by the rise in comps…Rite Aid has been facing tough competition. Just take a look at the March comps. Walgreen’s (WAG) growth in comps (up 3.0 percent) continued a recent trend of outpacing Rite Aid’s performance (down 0.1 percent)
c) Newmont Mining (NEM) announced plans to increase gold production by 35 percent and copper output by 90 percent by 2017 as demand continues to grow. The miner also implements a new dividend policy that’s tied to the price of gold. For every $100 gold prices rise, Newmont will raise its annual dividend by $0.20. That means its current quarterly dividend of $0.15 will be raised to $0.25.
d) PNC Financial (PNC) became the latest bank to raise its dividend. The bank boosts its quarterly dividend to $0.35 from $0.10 and announces a $500 million stock buyback program. Shares are flat after the announcement – remember, “sell on the news” has been the theme once banks announced their dividend hikes over the past couple of weeks.
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