On Monday, investors began the week on a generally upbeat note, with positive sentiment from last week's solid gains for the major-market benchmarks following through into today's session. Yet even though the major indexes saw only modest gains of about a quarter-percent to a half-percent, Newmont Mining (NYSE: NEM ) , J.C. Penney (NYSE: JCP ) , and Select Comfort (NASDAQ: SCSS ) all saw their shares climb much more extensively on what was otherwise a fairly quiet day.
Newmont Mining climbed 6% amid speculation over whether the gold and copper producer might merge with fellow gold giant Barrick Gold (NYSE: ABX ) to create a colossus in the mining industry. Interestingly, the moves followed reports last Friday that a proposed merger had reached advanced discussions but had eventually failed due to a failure to resolve some issues with respect to which mining assets might end up in a proposed company to be spun off after the merger. With $1 billion in annual cost savings, the two companies clearly have an incentive to do a deal, but Newmont shareholders are apparently happier with the company as an independent entity -- or believe that a better deal might come in the future.
J.C. Penney climbed 9% on relatively little news, although most traders pointed to unusual activity in the options market as a sign of a possible future move. With Easter having come this year toward the end of its fiscal first quarter, which runs through the end of April, investors were watching closely to see if Easter-related sales would help bolster the company's same-store sales. Given how weak J.C. Penney's performance was last year, it's almost a foregone conclusion that the retailer will be able to bounce back with positive comps. Yet from an earnings standpoint, few investors expect J.C. Penney to become profitable even within the next few years.
Select Comfort jumped 10% as the mattress-maker reported solid earnings results after the bell last Thursday. With the economy starting to fire more strongly and with the housing industry in particular seeing some encouraging signs of growth, Select Comfort saw same-store sales move up 2% on a 7% rise in overall revenue. With plans to open between 20 and 30 new stores this year and remodel many more, Select Comfort is betting that investing in a rebound now will pay dividends well into the future. Marketing strategies will cost money in the short run, but if they pay off, they could foster a new era of growth for the mattress specialist.
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