The market opened lower and the selling pressure was intense as the bears once again pushed the major indexes down to recent support levels. However, Wall Street got a couple of favorable economic reports which helped move the market off its lows.
The Dow was down triple-digits before the Chicago Purchasing Managers Index report came out and started to rebound after hearing a reading of 62.5 versus expectations for a print of 59.9. Elsewhere, consumer confidence jumped to a five-month high of 54.1 in November from 49.9 in October. Expectations called for an increase to 53.0. Although this was good news, a reading over 90 indicates a healthy economy and the index hasn’t been that high in 3 years.
In earnings news, Barnes & Noble (BKS, $13.68, down $1.19) is down 7% after reporting a wider-than-expected loss for its most recent quarter. The company reported a loss of $12.6 million, or $0.22 a share, versus $24 million, or $0.43 a share, in the year ago period.
This was another tough quarter for the struggling book chain as the company itself didn’t even know what it would earn for the quarter. Wall Street was expecting a much smaller loss of $0.08 a share while B&N expected anywhere between a profit of $0.05 a share to a loss of $0.25 a share for the quarter.
Revenue also came in short at $1.9 billion versus expectations for $2 billion. This represented a rise of just 1% and revenue in stores open at least a year fell over 3%. The figure is considered key because it excludes results from stores that were opened or closed during the year. This doesn’t paint a pretty picture going forward.
Today’s action is similar to Monday’s but we like the strong showing the bulls are displaying as they hold major support levels. There are numerous headwinds facing the market but all indications are the bulls are going to try to push the indexes to new highs by the end of the year.
As we head to press, the Dow is lower by 36 points to 11,016 while the S&P 500 is down 6 points to 1,182. The Nasdaq is showing a decline of 25 points to 2,500.
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