Retail sales fuel Russell rally
The Russell 2000 and the other major U.S. indices are up following news of better-than-expected retail sales in May. At 11:27 a.m. ET the Russell 2000 had gained 4.29 points, or 0.52%, to 826.01. The Dow Jones Industrial Average was up 61.18 points, or 0.46%, to 13,356.19.
Urban fashion apparel retailer Citi Trends, Inc. (Nasdaq: CTRN) has priced an underwritten secondary public offering of 2,135,000 shares of its common stock at $37.92 per share. All of the shares will be sold by shareholders, which means that Citi Trends will not receive any of the proceeds, the Savannah, Geo.-based company announced before the opening bell. Its stock is up $1.37, or 4%, to $39.29.
Supermarket chain, Pathmark Stores, Inc. (Nasdaq: PTMK) increased its quarterly revenue but widened its loss due to a jump in pre-tax expenses. The net loss for the first quarter ended May 5 was $8.5 million, or $0.16 per share, compared with $5.4 million, or $0.10 per share, during the same three months of 2006, the Carteret, N.J.-based company reported before the start of trading. It blamed the wider loss on a pre-tax charge of $4.2 million resulting from a voluntary retirement incentive program and costs associated with the proposed merger with retailer The Great Atlantic & Pacific Tea Co. (NYSE: GAP). Quarterly sales increased 0.1% to $999 million, compared with $998.5 million a year earlier. Shares are up $0.01, or 0.08%, to $12.94.
Aspect Medical Systems, Inc. (Nasdaq: ASPM) intends to offer roughly $110 million convertible senior notes due 2014 to qualified institutional buyers, the Norwood, Mass.-based maker of an anesthesia monitoring system announced before the market open. It added that it will use a portion of the proceeds to repurchase approximately two million of its shares from medical devices maker Boston Scientific Corp. (NYSE: BSX). The stock is down $0.30, or 25, to $15.30.
Wall Street’s bullish opening follows news that U.S. retail sales rose 1.4% in May, according to a report by the Commerce Department before the start of trading. That’s more than twice the expected increase of 0.6% and a sign that the economy may be picking up speed after posting lackluster first-quarter GDP growth of 0.6% at an annualized rate.
Excluding auto sales, which make up a fifth of retail, sales rose 1.3%.
However, import prices increased 0.9% in May after rising 1.4% in April, the U.S. Labor Department. That’s above economists’ projections and an indication that stronger economic growth may cause higher inflation.
