Stock futures are edging higher despite some less than bullish comments out of retailing stocks Wal-Mart (NYSE:WMT) $50.63 said sales continue to track the lower end of expectations, while a weekend Barron's article on Target (NYSE:TGT) $30.97 reports rising defaults in its credit operations.
S&P futures (sp03h) are higher by 5.10 points at 891.60, NASDAQ futures (nd03h) are gaining 6.5 points at 1,017, while Dow futures (dj03h) are gaining 42 points at 8,442.
Fair value for the S&P 500 today is $0.00, that price will not change during the session. HL Camp & Company has their computers set for program buying at $0.24 and set for program selling at $-2.74. Fair value for the NASDAQ-100 today is $4.90.
Discount retailer Wal-Mart (NYSE:WMT) $50.54 announced that sales last week were at the low end of its expectations for December, despite some early sales momentum coming after the Thanksgiving holiday that saw the company report its single biggest sales in company history. The company also said it is filing at $10 billion shelf registration and registering 16 million shares. The proceeds from any debt offering will be used to repay short- term borrowings, finance acquisitions, repay long-term debt as it matures or refinance debt. The 16 million shares will be distributed to charitable entities established by the Walton family.
Broad line retailer Target (NYSE:TGT) $30.97 are falling $1.36 to $29.61 over the New York ECNs after Barron's reported that defaults are rising at Target's credit operations. The article points out that Target currently earns 4% after-tax return on its credit card portfolio, which is well above the 1.5% achieved by credit specialists such as MBNA. If critics are correct and rising credit losses reduce the retailer's credit card profit margin to an MBNA type 1.5%, 2003 EPS at Target could be cut by about $0.15. The Barron's article said "that risk probably isn't factored into Target's price." Target said some increase in credit losses is already baked into its own forecasts.
Drug maker Forest Labs (NYSE:FRX) $96.95 is gaining $1.05 after the company announced a 2 for 1 stock split payable on January 8, 2003 to shareholders of record as of December 23.
Homebuilder Ryland Group (NYSE:RYL) $33.63 are higher at $34.99 after announcing that its board has approved an increased buyback program of 1 million shares to its previously buyback program. Ryland has already purchased 2.2 million shares in 2002, and had approximately 1 million shares remaining from its previous authorization, bringing the total remaining authorization up to 2 million shares.