After Market: Stocks Rise, S&P 500 Sets Another Record


Stocks posted solid gains on Thursday as investors ignored a weak economic report.

First quarter gross domestic product was revised to show the economy contracted 1 percent in the first three months of the year. But investors say that's old news. The horrible winter weather was a huge drag on growth, and economists say there's no chance that we're heading into another recession. In fact, most economists expect solid growth in the current quarter.

The Dow Jones industrial average (^DJI) gained 65 points, the Nasdaq composite (^IXIC) rose 22, and the Standard & Poor's 500 index (^GPSC) added 10 points, scoring its third record high in four days.

Earlier this month Hillshire Brands (HSH) offered to buy Pinnacle Foods (PF). Then two days ago, Pilgrims Pride (PPC) jumped in to break up that deal with a $6.4 billion bid for Hillshire. Now, Tyson Foods (TSN) has started a bidding war with a $6.8 billion offer for Hillshire, which is best known for its Jimmy Dean and Hillshire brands.

Shares of Hillshire jumped 17 percent today. They've soared 45 percent in the past week. As for the other players in this food fight: Tyson gained 6 percent, Pilgrims Pride fell 1 percent, and Pinnacle gained 1 percent.

Moving from what we eat to what we wear, Abercrombie & Fitch (ANF) jumped nearly 6 percent as its quarterly loss wasn't as bad as expected. But the stock is still down about 26 percent from a year ago.

Other movers:
  • Costco (COST) was little changed even though earnings came in slightly below expectations.
  • Michael Kors (KORS) fell 5 percent on new worries that its profit margins may weaken.
  • Tilly's (TLYS) tumbled 17 percent on a weak outlook for the current quarter.
Elsewhere, cybersecurity firm Palo Alto Networks (PANW) rose 5 percent after beating expectations. In addition, it will receive $175 million from Juniper Networks (JNPR) in a settlement of a patent suit.

Finally, J.P. Morgan (JPM) is swapping its ratings on a pair of leading biotech stocks. It raised the rating on Biogen Idec (BIIB) to "overweight," lifting the stock by 3.5 percent, but cut Celgene (CELG) to "neutral." Celgene fell by less than 1 percent.

What to Watch Friday:
  • The Commerce Department releases personal income and spending for April at 8:30 a.m. Eastern time.
  • The Institute For Supply Management-Chicago releases its survey of business conditions in the Chicago area for May at 9:45 a.m.
  • The University of Michigan releases its final survey of consumer sentiment for May at 9:55 a.m.
These major companies are scheduled to release quarterly financial statements:
  • Ann Inc. (ANN)
  • Big Lots (BIG)
-Produced by Drew Trachtenberg.

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We know the stocks aren't rallying because the decline of the middle class has reversed.

May 29 2014 at 11:49 PM Report abuse rate up rate down Reply

We just had one of the greatest rallies in our history. If you were in for it, congratulations. If you missed it, well take your lumps slowly average in and wait to put the majority in at a more opportune time. Getting people in at the high and out at the bottom is how money managers profit off average Joe investors. You have to ask yourself who really is paying to write what you read. I am taking steps to secure the money that I have made this time around:

1. Moving money to muni bonds. They are taxed less, increasing the net to me, and still have some nice yields.
2. I started a small business that did not take a lot of startup capital. It does not make a ton of money yet but it should grow over time, and we are already capital positive.
3. I needed some extra life insurance coverage. I got a policy that will net me about 4-5% over time in tax deferred dividends from LifeAnt Insurance. Not bad for something that protects my family too.
4. I am putting some money back into my house because we need to move to a bigger one within a couple years, but this is also tax deferred growth and can give a nice return when done correctly.
5. I bought some limited partnerships in real estate deals. I don't think real estate is quite as inflated as equity markets, but at the very least it is more diversity.

Do yourself a favor and don't get caught in the buy high sell low trap that cost so many their retirement savings.

May 29 2014 at 9:59 PM Report abuse -1 rate up rate down Reply

Amazing. A contraction in problems. Markets keep rising. Something sure doesn't seem right here.

May 29 2014 at 6:02 PM Report abuse rate up rate down Reply
1 reply to Frank's comment

Answer: The Markets are based on offshore profits.

May 29 2014 at 9:30 PM Report abuse -2 rate up rate down Reply