The Dow Jones and NASDAQ were down today as the only index with its head above water was the S&P, which was up 0.23%.  The Dow was down 0.19% closing at 8322.91, with the NASDAQ down 0.07% finishing the day at 1764.92.  Oil and gold were both up as the dollar weakened settling at $69.24 and $924.30 respectively.  Prices on the 10-year rose as investors sought safety, yields fell to 3.625%. 

Kroger [KR: 21.76, -0.02 (-0.09%)] announced earnings today, reporting net income of $435.1 million, or $0.66 per share, compared with net income of $386 million, or $0.58 per share from the same period a year ago.  Kroger said that sales fell from $23.1 billion to $22.8 billion; Kroger fell short of the street’s estimate of sales of $23.2 billion, but beat the earnings estimate of $0.62 per share.  Same store sales rose 3.1%, mainly driven by growth in Kroger brand products as customers are more price conscious and are attracted to them in the bad economy; brand products make up 35% of sales.  Kroger and all other traditional supermarkets have faced increased challenges lately, as Wal-Mart [WMT: 48.35, -0.24 (-0.49%)] has continued to steal customers.  Kroger has been able to lose fewer customers as they have lowered prices and have benefited as consumers trade down to their store brands.  Kroger expects to earn between $2.00 and $2.05 per share in 2009 with analysts predicting $2.04 per share. 

In tech news, it was announced that Intel [INTC: 15.81, +0.13 (+0.83%)] and Nokia [NOK: 14.46, +0.38 (+2.70%)] will collaborate on a new mobile device that is different from both smart phones and netbooks.  Both of these companies have recognized the current trend of consumers even in this current down market to continue to buy smart phones and netbooks.  These two companies are currently both major players in the smart phones and netbook market, as Intel’s Atom processor is predominant in netbooks and Nokia is the market leader in smart phone technology.  The two companies are looking into the future for the next great mobile technology and are hoping with the great ideas that both companies generate separately, that they can create even better ones by joining forces.  The financial terms have not been announced yet, but many in the tech world are looking forward to the collaborative work of the company, and investors should keep an eye on it as well.

The National Association of Realtors released new housing data today that showed existing home sales were up 2.4% to an annual rate of 4.77 million in May, up from 4.66 million in April; existing home sales are down 3.6% from May 2008.  Of these 4.77 million, 33% were from foreclosures or short sales below the earlier numbers this year between 45% and 50%.  May inventories were down 3.5% from April, representing a 9.6 month supply at the current sales pace.  Despite improving existing home sales numbers, prices are still low.  Prices were down 16.8% to $173,000 in May down from $207,900 the same month last year.  Prices have fallen as the demand for housing is week as higher credit and increased unemployment is discouraging buyers.  Many economists cannot see prices bottoming until sales consistently increase.

Check back tomorrow for another market recap from Bullish Bankers.

- Matt Shannon

Disclosure: The fund the author is associated with is long WMT.

Last 5 posts by Bullish Bankers

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