Hot stocks: Retail rebounds; WMG escalates in earnings; DLTR decreased; APD sets new 52-week high
Stocks posted solid gains on Tuesday, helped by strong retail earnings. Nasdaq and S&P 500 are both up about 1.4%.
The rally among retailers was led by results from Burlington Stores (BURL), Abercrombie & Fitch (NYSE:ANF) and American Eagle Outfitters (AEO). Urban clothing (URBAN), Nordstrom (JWN) and Citi Trends (CTRN) are also among the notable winners.
Earnings news has also raised the bar for Warner Music (WMG), recorded a double-digit percentage increase. Meanwhile, Air Products and Chemicals (APD) also showed gains, extending recent gains to hit new 52-week highs.
On the other hand, Dollar Tree (DLTR) was excluded from the retail rally. A weak forecast boosted sales at the low-priced retailer.
Area of Focus
A string of well-received earnings reports boosted retail stocks. Traditional names benefit the most, like Burlington Stores (BURL), Abercrombie & Fitch (ANF) and American Eagle Outfitters (AEO) all increased on their respective quarterly reports.
BURL and ANF are both up more than 20%, while AEO is up around 18%. Elsewhere in the field, Urban Outfitters (URBAN) increased by nearly 9%, Nordstrom (JWN) rose 6% and Citi Trends (CTRN) increased by nearly 5%.
Prominent bullies
Impressive financial figures drive profits in Warner Music (WMG). Shares rose 15% after the company showed strong earnings growth.
The company reported quarterly profits that were more than double what market analysts had predicted. Revenue increased 12% to $1.5 billion.
WMG ended the session at $31.09, up $4.11 on the day. This contributes to a sustained rally since the stock hit a 52-week low of $21.57 in the first half of October.
Shares are now up 44% from the low, although WMG is still 28% lower for 2022.
Prominent denizen
Dollar tree (DLTR) came under selling pressure after earnings forecast was included in the latest quarterly update failed to impress. With inflation concerns weighing on stocks, the low-cost retailer’s shares fell nearly 8%.
DLTR reported third-quarter results that beat expectations in both revenue and profit. However, the company says its profits will come at the lower end of the range of $7.10 to $7.40 a share. Analysts are looking for a figure of around $7.29 per share.
The conservative earnings forecast comes as higher costs cut profits. The company raised its sales forecast for the full year, saying it now expects results between $28.14 billion and $28.28 billion.
DLTR fell $12.87 to close at $152.37. The gain moderation slide was posted at the start of the month, with the stock recording its lowest close since October 24.
Remarkable new high
Air products and chemicals (APD) extended its recent uptrend with another 4% gain on Tuesday. With the upside, the stock has set a new 52-week high.
APD rose $12.75 to close at $309.16. During the session, the stock also recorded a 52-week intraday high of $309.57.
Shares have been up since the first half of October. Shares are up nearly 27% over the past month.
With the recent rally, APD has fully recovered the losses recorded earlier in the year. For the whole of 2022, the stock is now up nearly 5%.
For more on the biggest winners and losers of the day, click Looking for Alpha’s On The Move part.
