News Column

Daily Wrap: Tiffany shines, but poor sales dog PetSmart

May 21, 2014

By David Nicklaus, St. Louis Post-Dispatch

May 21--TODAY'S INDEXES -- Dow industrials 16,533.06 +158.75

S&P 500 1888.03 +15.20

Nasdaq 4131.54 +34.65

SPARKLING RESULTS: Tiffany shares advanced 9 percent after its first-quarter profit beat estimates.

GONE TO THE DOGS?: Investors weren't so fond of PetSmart, bidding its shares down 8 percent after the retailer reported a drop in first-quarter sales and reduced its earnings forecast for the year. CEO David Lenhardt cited "a challenging and volatile consumer environment."

WHERE THERE'S SMOKE: Tobacco companies Lorillard and Reynolds American were among the market leaders after Reuters reported that the two are in merger talks. Lorillard jumped 10 percent and Reynolds, the reported buyer, climbed 4 percent.

EURO OPTIMISM: Netflix shares added 5 percent on news of the company's biggest expansion in nearly three years. Netflix will offer its streaming video service in Germany, France and four other European countries.

LOCAL INDEX: The Bloomberg St. Louis Index rose 0.4 percent, about half of the gain in the S&P 500.


Allied Healthcare 7.2% Reliv International -4.5%

SunEdison 5.6% Mallinckrodt -2.8%

Brown Shoe 4.4% First Clover Leaf -2.7%

LOCAL GAINER: SunEdison shares continued their recent climb ahead of an initial public offering for the company's Singapore-based semiconductor unit. SunEdison Semiconductor shares are expected to start trading Thursday under the symbol SEMI.

ANALYST'S INSIGHTS: Could Express Scripts, St. Louis' largest public company, start paying a dividend? Maybe someday, writes JP Morgan analyst Lisa Gill. She says Express Scripts tries to return about half of free cash flow to shareholders, which will translate into $4 billion of stock buybacks this year. "While we believe a dividend is relatively unlikely in the very near term, we would not be surprised to see one put in place in the future," she adds. "... However, we point to a high degree of financial flexibility based on the company's strong cash flow generation, and note that most large cap peers in the Rx channel pay a dividend."

THE DAY AHEAD: Existing home sales may be the week's most closely watched economic indicator. Economists surveyed by Bloomberg expect April sales to be up 2.2 percent, to a seasonally adjusted rate of 4.69 million.


David Nicklaus is business columnist at the St. Louis Post-Dispatch. Subscribe to his Facebook page or follow him on Twitter @dnickbiz.


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Source: St. Louis Post-Dispatch (MO)

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