On Thursday, the stock market followed a pattern it has followed countless times before, clawing back from early losses as investors, once again, took every opportunity to take advantage of even the slightest of drops to make purchases at relative bargain prices. Initially, some investors were worried about the possibility that the Federal Reserve might start raising interest rates sooner than most thought, but most appear convinced that the Fed will keep its dovish monetary policy well beyond the beginning of next year. Helping to lift investors' spirits were Barnes & Noble (NYSE:BKS), Methode Electronics (NYSE:MEI), and Canadian Solar (NASDAQ:CSIQ), which posted sizable jumps of their own.
Barnes & Noble climbed 8% as the bookseller continued to react favorably to yesterday's decision to spin off its Nook division into a separately traded entity. Wednesday morning's earnings report continued the relatively ugly results that shareholders have gotten used to seeing, with losses coming in substantially worse than most investors expected, and with Nook maintaining its poor record of plunging sales with a 22% drop from year-ago levels. After the spinoff, Barnes & Noble's retail and textbook operations will look much better from a revenue and profit standpoint, and that could help push the stock's valuation up. Meanwhile, although Nook will be a money-losing operation for the foreseeable future, venturesome investors might well conclude that it's a reasonable bet on the device's growth prospects, or a potential takeover target.
Methode Electronics soared 14% after reporting record revenue and operating income for the quarter this morning. Sales for the maker of electronic components and systems for automotive and power applications shot up by almost 52% and, despite a slight earnings miss after adjusting for one-time items, guidance for the coming fiscal year was stronger than expected on both the sales and earnings fronts. The news is a good sign, not just for Methode, but also for the industrial sector as a whole, as it indicates that activity levels are healthy despite some concerns about the sustainability of the economic recovery.
Canadian Solar picked up 4.5% after the solar-module producer announced an agreement with Samsung to build a utility-sized solar power plant in Canada. The 140-megawatt project is expected to become operational in just more than a year's time, and should produce enough power to supply electricity to 16,000 residential customers. The Samsung partnership has been lucrative for Canadian Solar, and continued strength could help the solar company stay ahead of its peers and keep growing.