If you love volatile, triple-digit trading days, you have to love the U.S. stock market so far in 2015.
Once again U.S. markets roared higher, basking in further strength from the energy markets, and a debt for growth-linked bonds swap in Greece, thereby ending the standoff with that country’s creditors. And markets were so juiced up over the announcement by BP plc (ADR) (NYSE:BP) to cut capital expenditure by 13% in 2015, that they completely shrugged off a more than expected decline of 3.4% in December factory orders.
The Dow Jones Industrial Average scorched up 305 points, or 1.76%. The S&P 500 was ahead by 1.44%, and the Nasdaq rounded out the day 1.09% higher. And three of the best stocks of this quick-moving day were Office Depot Inc (NASDAQ:ODP), Wendys Co (NASDAQ:WEN), and Eaton Corp plc (NYSE:ETN). Here’s why.
Office Depot Inc (ODP)
Both Office Depot and Staples Inc. (NASDAQ:SPLS) jumped on speculation that the two companies are in private discussions to merge into one major office-supply chain of U.S. stores. ODP was up more than 21% on heavy volume of 53.6 million shares. Both stores have not fared well this year, and have been under steady pressure from shareholders to begin these discussions.
A previous merger of Office Depot and OfficeMax already was approved by the Federal Trade Commission. Now the question becomes whether a new merger with SPLS would create antitrust issues.
InvestorPlace editor Jeff Reeves nailed it yesterday, putting ODP on his list of 9 best cheap stocks to buy for 2015.
Wendys Co (WEN)
WEN stock rose by more than 8% today to a multiyear high, even after reporting mixed results for its fourth quarter, because the company said they it’s looking to sell about 500 more restaurants to company franchisees to help lower company costs. n 2014, Wendy’s sold 237 company-operated restaurants to franchisees.
Adjusted earnings were 10 cents per share, matching analysts’ expectations, but revenue of $502 million was below the Street’s view of $507.6 million. Expected 2015 adjusted earnings of 33 to 35 cents per share were below analysts’ predictions of 39 cents per share. But markets were more focused on the sales to franchisees, and so forgave the so-so earnings report.
WEN stock is up about 25% so far this year.
Eaton Corp (ETN)
Stellar fourth-quarter earnings lifted the power management company up more than 8% today. ETN reported $1.27 a share, ahead of estimates of $1.20 a share. A revenue increase of 0.7% year-over-year to $5.7 billion was a bit shy of the Street’s view of $5.59 billion.
Q1 earnings guidance of 95 cents to $1.05 a share were also below estimates of $1.11. But full-year guidance of $4.75 to $5.05 beat the projections on the high end by 8 cents. Eaton also said it had cut administrative costs by 10%, and R&D costs by 7%. ETN stock is up about 22% since October 2014.
As of this writing, Ethan Roberts did not hold any positions in the aforementioned securities.
