By Andria Cheng
Retail stocks opened higher Thursday after first-time jobless
claims in the latest week fell, a possible sign that the worst of
the recession may be over. OfficeMax Inc. shares jumped after
profit excluding items at the office supplies retailer exceeded
Wall Street expectations.
The S&P Retail Index (RLX) rose 2.3% to 341.09 in early
trading.
For the week, initial claims dropped 14,000 to 631,000.
Economists believe that claims may have peaked at 674,000 in late
March. Claims are considered one of the best tools for spotting
turning points in the economy. Rising job losses have hurt
consumers' confidence and their desire to spend.
The positive sentiment in the market was also bolstered after
the Federal Reserve kept its benchmark interest rate unchanged and
said Wednesday afternoon that the economic outlook had improved
over the last six weeks.
OfficeMax (OMX) stock jumped 14% to $6.85. The retailer said
Thursday that its first-quarter profit tumbled to $13.9 million, or
17 cents a share, from $63.3 million, or 81 cents, a year earlier.
Sales declined to $1.91 billion from $2.3 billion. Excluding
store-closing costs and other non-recurring items, the company said
it would have earned 23 cents a share. Analysts, on average,
estimated OfficeMax to earn 19 cents a share, according to
FactSet.
Rival Office Depot Inc. (ODP) shares were up 3.3%. Staples Inc.
(SPLS) stock was higher by 1.6%.
Costco Wholesale Corp. (COST) shares fell 0.7% to $47.32 after
its stock was cut to neutral from buy at UBS.
Rite Aid Corp. (RAD) shares climbed 6.2% to 91 cents a share.
The drugstore chain said Thursday that its April same-store sales
rose 1.8%. Non-pharmacy comparable sales in the four weeks ended
April 25 increased 3.2% while pharmacy same store sales, including
an approximate 4.5 percentage point of negative impact from new
generic drug introductions, increased 1.2%.
-Andria Cheng; 415-439-6400; AskNewswires@dowjones.com
