Market Wrap: Lululemon Stretched on Outlook; China Cuts Rates, Markets React; Best Buy Founder Says 'Adieu!'


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June 7, 2012 5:30 PM EDT Send to a Friend
Market wrap-up for June 6th

End of the Day: Dow Jones up 46.2 to 12,460.96; S&P 500 down 0.1 to 1,314.99; Nasdaq down 13.7 to 2,831.02

The following is a brief summary of events moving markets today:
  • Maybe this is a bad sign: The People's Bank of China cut its one-year lending rate by 0.25 points to 6.31 percent. This is the first time since late-2008 the bank has made such a move. The aim is to push investment and growth higher.

    The move comes ahead of the G20 summit, expected to take place on June 18th and 19th, and is expected to put pressure on other economies to take further measures for economic stimulus.

  • Bernanke stays on QE2, not ready to raise until next round: Fed Chief Ben Bernanke testified in front of a Congressional panel Thursday, saying the Fed is "ready to act" should more growth measures need to be taken. Bernanke noted some of the challenges in the economy, but stopped short of outlining a plan to spur growth, simply stating the Fed had a number of options and "nothing is off the table."

    For more color on the testimony, click here.

  • A crazy plan...just crazy enough to work: Best Buy Co. Inc. (NYSE: BBY) Chairman and founder Richard Schulze said he plans to step down and was also mulling what to do with his 20.1 percent stake in the company. Some have suggested Schulze might take the company private, a bold move for the founder.

  • At least warm-up beforehand: lululemon athletica (Nasdaq: LULU) shares were all but stretched to the limits Thursday following first-quarter numbers issued ahead of the opening bell. Sales rose 53 percent in the quarter while EPS came in at 32 cents per share, versus views calling for revs of $269.7 million and EPS of 30 cents.

    Looking ahead, however, lululemon said it sees second-quarter 2012 EPS of 28 cents to 30 cents and revs of $273 million to $278 million, both below Street views calling for EPS of 33 cents and revs of $289.8 million. For fiscal 2012, lululemon expects revs of $1.32 billion to $1.34 billion and EPS of $1.55 to $1.60, both missing views looking for revs of $1.35 billion and EPS of $1.63.

    Shares ended Thursday's session down about 8.8 percent.
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