After an early morning slump on a disappointing manufacturing data out of China and concerns about Ukraine, stocks crawled back to finish the day with modest gains. The Dow Jones Industrial Average (^DJI -0.31%) closed up 18 points or 1.1% as Pfizer weighed on the blue chips after a weak earnings report. Meanwhile, the S&P 500 gained 0.2% and the Nasdaq improved 0.3%.
Before markets opened, investors reacted to a purchasing managers' index out of China that showed manufacturing activity in April contracting with a reading of 48.1, down from a preliminary figure of 48.3, and tensions flaring in Ukraine after rebels shot down a Ukrainian helicopter. Stocks began to recover, however, after the Institute for Supply Management's service sector index showed its strongest growth in eight months with a reading of 55.2, better than expectations of 54.0 and up from March's figure of 53.1. The report was just the latest data point to show robust improvement in the U.S economy.
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Target (TGT -2.06%) shares were taking a spill today, falling 3.5% after it let go of CEO Gregg Steinhafel following the company's security breach late last year, when hackers gained access to millions of customer credit card numbers. In a release, the company thanked Steinhafel for his service and said CFO John Mulligan would replace him on an interim basis. The data breach not only threatened Target's customers, but also stained the company's reputation and caused a significant decline in sales and profits. The big-box chain has also been struggling to expand into Canada where the company saw a nearly $1 billion operating loss after opening 120 stores last year. Interestingly, the sell-off seems to indicate that the market is more nervous without Steinhafel at the helm. Some fear that even worse news is yet to come out, and the stock is unlikely to recover until a new CEO is named who can reinstill confidence in the company.
Also falling today was Tyson Foods (TSN -3.63%), which closed down 10% after missing earnings estimates and providing weak bottom-line guidance. The nation's largest meat processor turned in second-quarter earnings of $0.60 per share, below expectations of $0.63, as demand slowed in China because of low domestic pork prices there, and the company faced headwinds from harsh winter weather at home. Despite the sell-off, there were bright spots in the quarter as sales increased 7.7% to a company record at $9 billion, beating expectations of $8.84 billion. Full-year sales guidance was also stronger than expected at $37 billion, but a hog virus is expected to put a dent in pork production thus year, leading management guided full-year profits at "at least $2.78 per share" below estimates at $2.92.
