By Andria Cheng
Retail stocks turned higher Wednesday after the government
reported a better-than-expected rise in durable goods orders,
offsetting a weaker-than-expected new-home sales report.
The S&P Retail Index rose 0.6% to 311.04, erasing some of
its earlier gains after new-home sales dropped 0.6% to a seasonally
adjusted annual rate of 342,000 in May. Economists surveyed by
MarketWatch had expected a slight increase to 363,000
annualized.
Stronger orders for airplanes and machinery sent May orders up a
better-than-expected 1.8%, the third gain in four months, the
Commerce Department estimated.
Home improvement retailers Home Depot Inc. (HD) and Lowe's Cos.
(LOW) shares were both down slightly after the release of the home
sales data.
Investors' attention also will be focused on the Federal
Reserve's decision on interest rates Wednesday afternoon.
PetSmart Inc. (PETM) shares rose 4.4% after the pet supplies
retailer said late Tuesday it more than tripled its quarterly
dividend. It also plans to repurchase as much as $350 million of
stock.
Drugstore chain Rite Aid Corp. (RAD) shares rose 8.5% to $1.37
after it said Wednesday that its first-quarter loss narrowed to
$98.5 million, or 11 cents a share, from $162.8 million, or 20
cents, a year earlier. Revenue declined to $6.53 billion from $6.61
billion. The results included a $67 million non-cash charge related
to store closings and a $20 million gain on asset sales, including
prescription files. Analysts, on average, estimated the drugstore
chain to lose 12 cents a share on sales of $6.54 billion, according
to FactSet.
Home furnishings retailer Bed, Bath & Beyond Inc. (BBBY) and
sneaker giant Nike Inc. (NKE) shares were both up slightly ahead of
their respective releases of quarterly results Wednesday
afternoon.
-By Andria Cheng; 415-439-6400; AskNewswires@dowjones.com