Markets were heading higher on Friday morning after it was reported that consumer spending fell in July. The Commerce Department said that U.S. consumer spending dipped 0.1% after increasing 0.4% in June. This marks the first drop for the index since January. The drop in spending was largely attributed to a slowing in auto sales. There was a 0.7% decline in spending on durable goods, such as vehicles. Spending on nondurable goods dipped 0.1%, while spending on services remained flat. This data came in below the 0.2% that economists were expecting. Consumer spending is a very important number because it accounts for two-thirds of U.S. economic activity.
Shares of Big Lots Inc (BIG) were trading lower after the company reported results that outperformed analysts’ expectations. The discount retail giant announced second-quarter net income came in at $19.94 million, or 36 cents per share, which was up from the $18.83 million, or 31 cents this time last year. Earnings for the quarter were $17.21 million, or 31 cents per share. This beat out the 30 cents per share analysts had projected. Net sales were up to $1.2 billion, topping out last year’s $1.18 billion. This was on par with analysts’ expectations. The company announced they are expecting full year earnings to come in between $2.40 and $2.50 per share. David Campisi, CEO and President, said, “For the second consecutive quarter, our comps were positive and comfortably within the guidance range we provided, and our earnings were above the high end of our range. We believe this in an indication that our core customer, Jennifer, is responding to our improved merchandising strategies and marketing execution.”
Shares of Apple (AAPL) were rising slightly after the company announced a new feature in the next model of the iPhone. The company is working with NXP Semiconductors to add near-field communications technology into the next generation of iPhones. This new chip will enable Apple’s smartphone users to pay by touch. The chips will allow for the phones to connect to payment terminals or ticketing systems. The company is hosting an event on September 9, where they are expected to reveal the latest device.
That’s all for today,
Warren Gates, Normandy Research