Aug. 15 - Summary of business headlines: Stocks wait for more after earnings from Cisco, Target, and Staples; Facebook shares rise ahead of lock-up end; Consumer inflation tame, Homebuilder sentiment and industrial production up; Germany's Merkel heads to Canada. Conway G. Gittens reports.
A busy earnings day but Wall Street hardly noticed. Most of the market was little changed, but the Nasdaq was up about half-a-percent. After the close, Cisco announced earnings excluding items, which topped low expectations, and sales were ahead as well. Target is seeing early success with smaller stores and more fresh food options at its larger locations. Second-quarter profits beat forecasts and the discount retailer is boosting guidance for the year. By the way, Target is part of a group of retailers teaming up to develop a mobile payment system to take on Google Wallet and Square. Staples is having less success. The top U.S. office supply chain is cutting sales and profit forecasts, hurt by increased competition in the U.S. and weakness in Europe. Shares slumped to their lowest close since 2003. Meanwhile, Thursday marks the end of the first ban on Facebook employees and early shareholders cashing-in from the IPO. Some 2 billion shares could be up for grabs. John Marino of P/E Hub gives a clue on who the notable sellers could be. SOUNDBITE: JOHN MARINO, EDITOR, P/E HUB (ENGLISH) SAYING: "Expect Goldman Sachs to be one of the big sellers of Facebook stock come August 16th. They were one of the latest investors in the company, meaning they bought the most amount of shares at the greatest value possible. Excel Partners is probably the good number two pick to be selling stock. They amassed a sizable position in the company and even though it was an early stage investment it would be a great time to re-coup some of that." On the economic front: homebuilder sentiment jumped to a more than five year high in August.... Industrial production was up in July in another sign the economy is doing better in recent weeks... And consumer prices were flat for a second month, giving the Federal Reserve the room to add more stimulus if it sees fit. Germany's Angela Merkel is in Canada to talk trade and economics. Back at home stocks across Europe were slightly lower. Conway Gittens, Reuters