Mid-Morning Market Update: Markets Surge; Lululemon Profit Beats Expectations

Following the market opening Thursday, the Dow traded up 0.94 percent to 17,697.24 while the NASDAQ jumped 1.17 percent to 4,738.62. The S&P also rose, gaining 1.07 percent to 2,047.73.

Leading and Lagging Sectors

Cyclical consumer goods & services shares gained 1.27 percent in Thursday’s trading. Meanwhile, top gainers in the sector included Lululemon Athletica LULU, up 10 percent, and Urban Outfitters URBN, up 9.7 percent.

In trading on Thursday, basic materials shares were relative laggards, down on the day by about 0.44 percent. Meanwhile, top losers in the sector included Freeport-McMoRan FCX, down 3.8 percent, and Yamana Gold AUY, off 3.9 percent.

Top Headline

Lululemon Athletica LULU reported better-than-expected fiscal third-quarter earnings. However, the company issued a downbeat forecast.

The Vancouver, Canada-based company posted a quarterly profit of $60.5 million, or $0.42 per share, versus a year-ago profit of $66.1 million, or $0.45 per share. Its revenue climbed 10% to $419.4 million from $379.9 million. However, analysts were projecting earnings of $0.38 per share on sales of $424.7 million.

For the fourth quarter, Lululemon projects earnings of $0.65 to $0.69 per share on revenue of $570 million to $585 million. Analysts expected earnings of $0.72 per share on sales of $594.8 million.

Equities Trading UP

Covenant Transportation Group CVTI shares shot up 18.11 percent to $28.89 after the company issued a strong Q4 earnings forecast.

Shares of The Advisory Board Company ABCO got a boost, shooting up 10.28 percent to $41.64. Advisory Board announced its plans to acquire Royall & Company for $850 million. Analysts at Stifel Nicolaus upgraded Advisory Board Company from Hold to Buy.

Restoration Hardware Holdings RH shares were also up, gaining 12.92 percent to $97.31 following earnings results that beat analyst expectations.

Equities Trading DOWN

The Men's Wearhouse MW shares tumbled 3.51 percent to $40.73 after the company reported downbeat earnings for the third quarter.

Shares of Ariad Pharmaceuticals ARIA were down 3.56 percent to $6.77. Credit Suisse downgraded ARIAD Pharmaceuticals from Neutral to Underperform and lowered the price target from $8.00 to $6.00.

Star Gas Partners, L.P. SGU was down, falling 3.93 percent to $5.95. Star's net loss widened by $11.9 million to $25.8 million in the fiscal fourth quarter.

Commodities

In commodity news, oil traded down 1.15 percent to $60.24, while gold traded down 0.97 percent to $1,218.40.

Silver traded down 0.97 percent Thursday to $17.02, while copper rose 0.76 percent to $2.92.

Eurozone

European shares were mostly lower today. The eurozone’s STOXX 600 fell 0.36 percent, the Spanish Ibex Index slipped 0.15 percent, while Italy’s FTSE MIB Index declined 0.23 percent. Meanwhile, the German DAX climbed 0.28 percent and the French CAC 40 dropped 0.39 percent while UK shares declined 0.67 percent.

Economics

U.S. retail sales increased 0.7% in November, versus a 0.5% growth in October. However, economists were estimating a growth of 0.4%.

U.S. jobless claims declined 3,000 to 294,000 in the week ended December 6. However, economists were estimating initial claims to reach 296,000 in the week.

U.S. import prices slipped 1.5% in November, versus economists’ expectations for a 1.7% decline.

U.S. business inventories rose 0.20% in October, versus economists’ expectations for a 0.20% gain.

The Treasury is set to auction 3-and 6-month bills.

Data on money supply will be released at 4:30 p.m. ET.