Ultimate Market Recap: Yahoo! Up Almost 4%, Burger King Debuts New Fries

Thursday Morning’s Top Stories

Yahoo! Inc. (NASDAQ:YHOO) bounced almost 4% before the opening bell.  Buyout rumors continue to fuel the stock.  Reports explain that Chinese partner Alibaba and others may take a 20% position in the internet portal giant.  Competitors include: AOL (NYSE:AOL) and Google (NASDAQ:GOOG).

Kohl’s Corp. (NYSE:KSS) is falling 6.3% in early trading after reporting that sales at stores open at least on year fell 6.2% from last year.  Analysts were expecting a 2% rise in sales.

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Shares of Kroger Co. (NYSE:KR) jumped 3% after announcing third quarter results.  Net income decreased 1% to $195.9 million (33 cents per share), compared to $202.2 million (32 cents per share).  On the positive, revenue did increase from $18.7 billion to $20.6 billion. Competitor Wal-Mart (NYSE:WMT) traded lower early Thursday.

Gap Inc. (NYSE:GPS) shares surged 4%, despite announcing that sales at stores open at least one year declined 5%.  “This is just the start of the holiday selling season and we expect December to remain fiercely competitive and highly promotional,” said Chairman and Chief Executive Glenn Murphy.

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Target (NYSE:TGT) is edging higher after announcing that sales at stores open at least on year increased 1.8%.  Analysts were expecting an increase of 2.8%.  “November sales were near the low end of our expectations for the month as we compared against very strong performance last year,” said Chairman and Chief Executive Gregg Steinhafel.

Shares of Lululemon Athletica Inc. (NASDAQ:LULU) are getting crushed by 15% this morning.  The company reported disappointing sales and a weak outlook.  The company also experienced a 77% rise in inventory, which raised eyebrows.

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Thursday Morning Hot Stocks

The Dow Jones Industrial Average is trading above 12,000 and the S&P 500 Index is trading at 1,245. Here are today’s hottest stocks on Wall Street:

  1. Lululemon Athletica inc. (NASDAQ:LULU): Shares of Lululemon Athletica inc. are trading lower 11% today. Lululemon Athletica Inc designs and retails athletic clothing. The Company produces fitness pants, shorts, tops and jackets for yoga, dance, running, and general fitness.
  2. Gildan Activewear Inc. (NYSE:GIL): Shares of Gildan Activewear Inc. are trading lower 28% today. Gildan Activewear Inc. manufactures and markets branded basic activewear. The Company sells its products principally in the wholesale imprinted activewear segment of the North American apparel market. Gildan sells cotton T-shirts, placket collar golf shirts, tank tops, and sweatshirts.
  3. Magma Design Automation, Inc. (NASDAQ:LAVA): Shares of Magma Design Automation, Inc. are trading higher 24% today. Magma Design Automation, Inc. designs software. The Company’s software enables chip designers to accelerate time-to-market for complex integrated circuits used in the communications, computing, consumer electronics, networking, and semiconductor industries.
  4. Movado Group, Inc (NYSE:MOV): Shares of Movado Group, Inc are trading higher 15% today. Movado Group, Inc. designs, manufactures, retails, and distributes watches as well as jewelry, tabletop, and accessory products. The Company markets several watch brands in North America, Western Europe, and the Far East.
  5. Charming Shoppes, Inc. (NASDAQ:CHRS): Shares of Charming Shoppes, Inc. are trading higher 9% today. Charming Shoppes, Inc. retails women’s specialty apparel. The Company operates chains of women’s large-size specialty apparel stores. Charming Shoppes also retails apparel, accessories, footwear, and gifts through catalogs.
  6. The Kroger Co. (NYSE:KR): Shares of The Kroger Co. are trading flat today. The Kroger Co. operates supermarkets and convenience stores in the United States. The Company also manufactures and processes some of the foods that its supermarkets sell.
  7. Yahoo! Inc. (NASDAQ:YHOO): Shares of Yahoo! Inc. are trading higher 3% today. Yahoo! Inc. is a global Internet media company that offers an online guide to Web navigation, aggregated information content, communication services, and commerce. The Company’s site includes a hierarchical, subject-based directory of Web sites, which enables users to locate and access information and services through hypertext links included in the directory.
  8. Assured Guaranty Ltd. (NYSE:AGO): Shares of Assured Guaranty Ltd. are trading higher 16% today. Assured Guaranty Ltd. provides financial guaranty insurance and reinsurance, as well as mortgage guaranty coverage. The Company’s products include guaranties for municipal finance, structured finance, and corporate bonds.
  9. The Talbots, Inc. (NYSE:TLB): Shares of The Talbots, Inc. are trading lower 4.5% today. The Talbots, Inc. is an international specialty retailer and direct marketer of women’s apparel, accessories, and shoes. The Company operates stores in the United States and Canada. Talbots also retails products over the Internet and through its catalog.
  10. Synopsys, Inc. (NASDAQ:SNPS): Shares of Synopsys, Inc. are trading lower 1% today. Synopsys, Inc. supplies electronic design automation solutions to the global electronics market. The Company provides design technologies to creators of advanced integrated circuits, electronic systems, and systems on a chip. Synopsys also provides consulting services and support to its customers to streamline the overall design process and accelerate time to market.

Thursday’s Trending Stocks

For the first time since 1998, Burger King, the second largest hamburger chain behind McDonald’s (NYSE:MCD), has changed its french fry recipe.  The new fries are thicker and contain 20% less sodium than competitors.  The fries also contain a coating that makes them crisper and keeps them hotter longer.  “We’re always trying to have the best menu possible.  French fries are a big seller for us and we want to make sure we’re always improving,” said Leo leon, vice president of innovation.

Burger King’s new french fries will be available in more than 7,000 North American locations by December 5. The move is seen as an attempt to keep up with competitors, and appeal more to the health conscience consumer. Rival burger chain McDonald’s (NYSE:MCD) is often considered to have the best tasting french fries in the industry.  In the most recent Zagat’s annual fast food survey, where 6,000 people weighed in, McDonald’s took home the title of Best Fries. However, Burger King and Wendy’s (NYSE:WEN) placed higher than McDonald’s in the best burger category.

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At the end of last year, Wendy’s/Arby’s Group, Inc., the third largest fast food company in the United States, changed its french fries recipe for the first time in company history.  Wendy’s decided to leave the potato skin on, change cooking oils, and add sea salt to the fries.  Shares have responded with a near 7% gain year-to-date.

One of the great success stories with recipe changes involves Dominos Pizza Inc. (NYSE:DPZ).  In late 2009, the pizza company changed its recipe to 100% real mozzarella cheese, and added garlic-herb seasoning to its crust.  The following year, sales increased and the stock surged 90%.  Currently the stock is up over 100% this year, while rival Papa Johns (NASDAQ:PZZA) is up 36%.

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Going forward, companies will continue to adapt to the changing health habits of consumers.  For example, coffee giant Starbucks (NASDAQ:SBUX) announced in November that it is pushing into the health and wellness sector buy purchasing juice company Evolution Fresh for $30 million.  Evolution Fresh products will replace PepsiCo Inc.’s (NYSE:PEP) Naked brand juices in its coffee shops.  Even the Cheesecake Factory Inc. (NASDAQ:CAKE), which is known for its more than generous portion sizes, has introduced a new low-calorie menu option.

Investors looking for a health conscience consumer play, should also consider time tested favorites such as Chipotle Mexican Grill Inc. (NYSE:CMG) and Panera Bread Co. (NASDAQ:PNRA), which have gained 500% and 180% in the past three years.

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Market Recap

Markets closed mixed on Wall Street today: Dow -0.21%, S&P-0.19%, Nasdaq +0.22%, Oil -0.37%, Gold -0.06%.

On the commodities front, Oil (NYSE:USO) fell to $99.99 a barrel. Precious metals were mostly flat, with Gold (NYSE:GLD) falling slightly to $1,749.30 an ounce while Silver (NYSE:SLV) didn’t move at $32.81.

Hot Feature: Congress Split on Extending Unemployment Benefits and Payroll Tax Cuts

Today’s markets were mixed because:

1) Mario Draghi. Investors were also focused today on comments from European Central Bank president Mario Draghi who, speaking before the European Parliament, said Europe needs a “new fiscal compact” to ensure that budget rules are respected and enforced. Some investors interpreted Draghi’s suggestion that “other elements might follow” the compact’s adoption as a hint that the ECB would then be willing to step up its rescue efforts and intervene in euro-zone sovereign debt markets on a large and unlimited basis. Though investors have been clamoring for the central bank to take action, it has been reluctant to prop up government finances, not only because it would risk inflation, but because it would let profligate nations off the hook for unsound fiscal practices.

2) Unemployment. The number of people filing for initial unemployment benefits unexpectedly rose by 6,000 to 402,000 last week, Labor Department figures showed today in Washington, well above the 390,000 jobless claims economists had been forecasting for the week ending November 26. Markets are now awaiting Friday’s monthly jobs report

3) Autos. Lower gas prices and wider availability of Japanese models made November the American auto industry’s best sales month in more than two years. Today Chrysler, Ford (NYSE:F), General Motors (NYSE:GM), Nissan, and Toyota (NYSE:TM) all reported year-over-year improvements in U.S. sales, with only Honda (NYSE:HMC) reporting a decline. Honda and Toyota were the two companies that experienced the biggest disruptions related to the earthquake and tsunami that struck Japan in March. However, unlike Honda, Toyota has been able to claw its way back, with November sales up 6.7 percent compared to last year. November’s results represent Toyota’s first year-over-year sales increase in the U.S. in seven months.

BONUS: EU Bank Writedowns May Exclude Debt Issued Before 2013

After Hours Radar Stocks

Shares of Electronic Arts (NASDAQ:ERTS) are edging .10% higher in late trading.  The video game maker announced Thursday that it has purchased KlickNation, a maker of social games.  KlickNation has developed Facebook games such as Age of Champions and SuperHero City.  Competitors include: Take-Two Interactive Software Inc. (NASDAQ:TTWO) and Activision Blizzard, Inc. (NASDAQ:ATVI).

After closing 2.1% higher on Thursday, shares of H&R Block (NYSE:HRB) are down more than 3% in extended hours.  The tax company reported a fiscal second-quarter loss of $141.7 million (47 cents per share), compared to a loss of $109 million (36 cents per share) last year.

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Zumiez Inc. (NASDAQ:ZUMZ) is surging more than 12% after the closing bell.  The company reported strong profits for the third quarter.  Net income for Zumiez Inc. rose to $14.1 million (45 cents per share), compared to $12.3 million (40 cents per share) in the same quarter a year earlier. This marks a rise of 14.8% from the year earlier quarter.  Competitors include: Hot Topic Inc. (NASDAQ:HOTT) and Pacific Sunwear of California (NASDAQ:PSUN).

Amid privacy concerns, Apple (NASDAQ:AAPL) has decided to phase out tracking software from Carrier IQ Inc.  Apple announced it stopped supporting the company and most of its products when they were upgraded to the iOS 5 mobile operating system, which was released two months ago. Competitors include: Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN).

Verizon (NYSE:VZ) is climbing .16% higher after the company’s board named President and CEO Lowell McAdam as its chairman. The move will take effect January 1. Mr. McAdam has been president and CEO since August 1, and has been on the board since March.  Verizon competes with AT&T (NYSE:T) and Sprint (NYSE:S).

Investing Insights: Are Shareholders Benefiting From the Health Conscience Consumer?