Stocks in New York Continue to Unwind
05/20/08 - 03:25 PM EDT
Sarina Penn
An analyst note from Brown Brothers Harriman identified one of the main culprits in Germany's Centre for Economic Research, which suggested that the European Central Bank might hike interest rates in the near term. That would further compound the dollar's slide against the euro, and the statement also runs contrary to the ECB's own recent dollar-boosting remarks suggesting it has shifted to a neutral stance.
Among equities, Home Depot said its first-quarter profit plunged by two-thirds to $356 million, or 21 cents a share, as the home-improvement goods retailer continued to suffer from housing-sector woes. Excluding a one-time charge related to store closings and paring back of store-growth plans, earnings came to a better-than-expected 41 cents a share. Nonetheless, shares slumped 5.8%. Also, last night Standard & Poor's cut Fannie Mae (FNM Quote - Cramer on FNM - Stock Picks) risk-to-the-government ranking, even while upholding Fannie's ratings for senior unsecured debt, subordinated debt, and preferred stock. Shares were down 4%. Back in earnings, Target (TGT Quote - Cramer on TGT - Stock Picks) beat Thomson Reuters's analyst estimates for 71 cents a share by 3 cents, though same-store sales dipped 0.7% and overall revenue fell short despite booking a rise from a year earlier. Shares were down 1% to $54.40. Elsewhere, Saks (SKS Quote - Cramer on SKS - Stock Picks) shares surrendered 8.5% after its fiscal first-quarter income, up two-thirds from last year, nevertheless missed Street expectations. Having a better day was office-supplies retailer Staples (SPLS Quote - Cramer on SPLS - Stock Picks), which said its quarterly profit picked up a bit to $212 million as the company benefited from its international exposure. That came a day after Staples went hostile with its $2.34 billion (1.5 billion euros) bid for Dutch-based Corporate Express. Staples shares were up a dime at $23.67.
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