US HOT STOCKS: Hot Topic Active In Late Trading

7th Jul 2010 22:01

U.S. stocks closed higher Wednesday as the Dow Jones Industrial Average jumped 275 points to 10018, the Standard & Poor's 500 climbed 32 points to 1060 and the Nasdaq Composite gained 66 points to 2159. Among the companies whose shares have been actively trading in the after-hours session is Hot Topic Inc. (HOTT). Retailer Hot Topic posted a more modest decline in June same-store sales than analysts were expecting, while peer Zumiez Inc.'s (ZUMZ) results topped analysts projections for the sixth time in seven months. Shares in Hot Topic were initially up 3.1% at $4.99 in after-hours trading, but were recently back down at Wednesday's closing level of $4.84. Zumiez shares initially fell 1.9% to $16.93, but later moved back to their closing price of $17.26. Regular-Session Movers Business-advisory firm FTI Consulting (FCN, $32.14, -$11.13, -25.72%) predicted a surprise decline in second-quarter earnings and cut its full-year guidance. Explaining the pessimistic outlook, Chief Executive Jack Dunn said that, while its economic consulting, strategic communications and forensic and litigation consulting segments--its "procyclical" practices--were all growing, progress wasn't up to pace with what the company had originally anticipated. He said the markets for bankruptcy, restructuring and mergers and acquisitions are significantly slower than expected. The outlook also weighed on Duff & Phelps Corp. (DUF, $10.92, -$0.94, -7.93%), which provides independent financial-advisory and investment-banking services. Shares of State Street Corp. (STT, $36.63, +$3.29, +9.87%) rose Wednesday after the bank said it will report a second-quarter profit well above analysts' forecasts, putting the company on track to hit its full-year guidance. Fellow trust banks Northern Trust Corp. (NTRS, $49.14, +$3.18, +6.92%) and Bank of New York Mellon Corp. (BK, $26.32, +$1.58, +6.39%) also traded higher, as they are seen as similarly exposed to foreign currency fluctuations that, Janney Capital Markets analyst Thomas McCrohan said, helped boost State Street's revenue in the second quarter. Family Dollar Stores Inc.'s (FDO, $36.26, -$3.18, -8.06%) fiscal third-quarter earnings increased 19% as the discount retailer continued to report higher sales and margins. The company said the strength continued into June, with the month's same-store sales up 5.5%. As such, it predicted growth of 5% to 7% for the fourth quarter. But shares fell as it projected a profit below analysts' expectations as it anticipates continued caution by shoppers. Fellow discounters Dollar General Corp. (DG, $27.95, -$0.05, -0.18%) and Dollar Tree Inc. (DLTR, $41.61, -$1.32, -3.07%) also traded lower. Affymetrix Inc. (AFFX, $4.04, -$1.51, -27.21%) cut its revenue view for the second quarter, saying equipment-purchase cycles from some of its customers are delayed and lengthened. The maker of assays and systems to analyze genetic information said it now expects revenue to range from $71 million to $72 million, down from its previous guidance of $80 million to $82 million, which was lower than analysts' forecasts at the time it was given. Skilled Healthcare Inc. (SKH, $1.52, -$4.70, -75.56%) faces payments of more than $671 million in damages awarded by a California jury in a more than four-year-old lawsuit over alleged violations at 22 of its nursing facilities. The jury said the company violated the California health and safety code that mandates that nursing homes maintain 3.2 nursing hours per patient per day. The Skilled Healthcare verdict weighed on fellow nursing-home company Sun Healthcare Group Inc. (SUNH, $7.39, -$0.39, -5.01%), which also has exposure to California. But Leerink Swann defended Sun Healthcare, saying the company hasn't been sued for the same issue. "We believe the company faces minimal risk if its California staffing levels are investigated," Leerink wrote. BP PLC (BP, $33.19, +$1.28, +4.01%) Chief Executive Tony Hayward met with Abu Dhabi's powerful Crown Prince Mohammed bin Zayed Al Nahyan during a visit to the oil-rich sheikdom Wednesday, and said he would be happy to see the city-state's sovereign wealth fund buy a stake of up to 10% in BP, a person with knowledge of the meeting told Zawya Dow Jones. AES Corp. (AES, $9.86, +$0.96, +10.79%) said its board approved a $500 million stock-buyback program, the latest to do so in the improved credit and earnings environment. The power producer's shares outstanding have a total market value of about $7 billion, according to Tuesday's closing price. Allegiant Travel Co. (ALGT, $44.98, +$2.42, +5.69%) carried passengers greater distances on fuller planes in June as a key revenue metric improved for the airline. Hedge fund Ramius disclosed a 6.2% stake in Aviat Networks Inc. (AVNW, $3.69, +$0.23, +6.65%) and said the wireless solutions company was "deeply undervalued." Ramius said the company was barely trading above the $3.35-per-share value of its net current assets, and below its tangible book value of $4.37 per share. The fund said it hopes to continue discussions with Aviat management that lead to "swift actions" to "unlock shareholder value." Borders Group Inc. (BGP, $1.30, +$0.13, +11.11%), the nation's second largest bookstore chain by sales, has launched an e-bookstore powered by Kobo Inc., the Canadian e-book retailer in which Borders owns an investment stake. Howard Weil raised its stock-investment rating on exploration-and-production company Brigham Exploration Co. (BEXP, $15.93, +$1.06, +7.13%) to market outperform from market perform, citing a recent pullback in the stock. Health-insurance giant UnitedHealth Group Inc. (UNH, $29.20, +$0.31, +1.07%) has decided against covering CardioNet Inc.'s (BEAT, $4.67, -$0.10, -2.10%) outpatient cardiovascular telemetry, calling it "unproven for managing cardiac arrhythmias." The company, which makes systems that monitor heart-rhythm disorders for people on an outpatient basis, said Wednesday it is currently analyzing the potential impact of the coverage decision on its operations and will address it later this month when it discusses second-quarter results. Sidoti & Co. upgraded Carpenter Technology Corp. (CRS, $34.14, +$2.14, +6.69%) to buy from neutral, noting a 19% decline in the maker of specialty metals' share price since a June 15 high. The firm said shipments to aerospace engine customers improved sequentially in the first three quarters of fiscal 2010 and it expects aerospace sales will increase 20% in fiscal 2011. (MORE TO FOLLOW) Dow Jones Newswires July 07, 2010 17:01 ET (21:01 GMT)