Investors had waited all week to see how the U.S. economy would perform on the employment front, and they were largely pleased with what they saw on Friday. Both the Dow and the S&P 500 jumped out to new record levels yet again today as investors took the not-too-strong, not-too-weak reading on jobs as evidence that the current trajectories of the economy and the stock market are sustainable. Helping to lift stocks today were VeriFone Systems (PAY), Keurig Green Mountain (GMCR.DL), and Petroleo Brasileiro (PBR -0.88%), each of which jumped substantially more than the broader market.
Source: VeriFone Systems.
VeriFone Systems jumped almost 9% as the payment-processing equipment company posted a stronger earnings report than most investors had expected. Revenue rose 9% and, although adjusted income came in lower than year-ago levels, VeriFone still outpaced its own initial projections for the quarter. In particular, customers have been making substantial upgrades to their electronic-payments equipment in the aftermath of major data breaches, and VeriFone anticipates that those trends should continue, issuing favorable guidance for the current quarter and full fiscal year. In combination with restructuring efforts to cut costs, VeriFone seems to be doing everything shareholders want to see, and the stock is responding accordingly.
Keurig Green Mountain gained 8%, with most of the gains coming in the last couple hours of the trading day. Speculation arose that with soft-drink giant Coca-Cola having made two separate major purchases of positions in the maker of the Keurig home-brew coffee machine during the past several months, additional share purchases, or even a full takeover bid for Keurig Green Mountain, might come in the near future. Options traders noted substantial activity in short-term options, but neither company released any news during the trading session that would suggest such a move is taking place.
Petrobras rose nearly 8% as investors in Brazil cheered recent polls showing that Brazilian President Dilma Rousseff's popularity dropped, suggesting the possibility of a change in government after elections later this year. Brazilians are frustrated with high inflation combined with slowing economic growth, and Rousseff has thus far failed to find success in accelerating the economy's expansion while fighting price pressures. With the Brazilian real rising against the U.S. dollar, and with the Brazilian stock market jumping substantially today, Petrobras and its vast wealth of natural resources is a popular vehicle U.S. investors use to participate in rising prospects for Brazil.
