Another day, and yet another new multi-year high for the broad-based S&P 500 , which advanced on the heels of more positive political and economic news.
On the political front, the House of Representatives approved a bill to avert a government shutdown on March 27 because of the recently enacted $85 billion sequestration bill. The bill allows the Pentagon and Veterans Affairs Department added flexibility that few other agencies have with regard to how cuts are to be made.
Today’s economic data also continued to favor an extended rally. The Mortgage Brokers Association’s mortgage application index rose a robust 14.8% for the first week of March, signaling that buying activity picked up again as mortgage rates fell. The Automatic Data Processing (NASDAQ:ADP) employment report was an even bigger driving force today, with private-sector jobs showing a 198,000 increase over last month – well ahead of the 150,000 job increase economists had anticipated.
All told, the S&P 500 shrugged off the urge to take profits, and crept higher by 1.67 points (0.11%), to close at 1,541.46.
Today’s big winner – and I should probably have warned you to be seated before writing this – is discount retailer Big Lots, Inc. (NYSE:BIG), which rose 6.1% after reporting better-than-expected fourth-quarter results! That is not a misprint; Big Lots finally beat Wall Street’s estimates! For the quarter, Big Lots, Inc. (NYSE:BIG)’s revenue increased 5%, to $1.8 billion, as its Canadian operations reported their first profitable quarter in roughly two years, and EPS advanced to $2.09, compared to just $1.75 last year. Still, it was more of the same for the discount retailer, with same-store sales declining 3.5%, and first-quarter EPS forecast to be well below expectations. Although its full-year forecast met the mark, I’m still skeptical about this turnaround.
Following Big Lots, copper miner Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) found its way into the plus column for a change, tacking on 4.1%. The impetus was an overnight article from Bloomberg, which noted that the company may double its sales of copper to China over the next three years. Javier Targhetta, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)’s senior vice president of marketing and sales, is targeting sales of 800,000 to 1 million metric tons of copper to China by 2016, up from 500,000 this year. This news really doesn’t come as much of a surprise — China passed a $156 billion stimulus bill in September, which primarily focuses on infrastructure improvements. This should bode well for Freeport over the long run.