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Safeway, a major grocery store chain, reported higher profit with the help of tax benefits. Revenue fell and missed analysts' expectations. Safeway's stock plunged almost 14 percent to $24.32. Investors were concerned about competition from dollar stores and big-box retailers. In a report to clients, ConvergEx Group chief market strategist Nicholas Colas noted companies' higher earnings but said they don't match the "real feel" of an economy still crimped by "lackluster jobs growth, a flattening rate of improvement in the housing market, and incremental government austerity measures." "If U.S. companies have proven anything in the last four years of subpar macroeconomic results," Colas wrote, "it is that they can make gallons of lemonade from just a few shriveled bits of citrus." Among other companies making big moves: Children's clothing company Carter's and motorcycle maker Harley-Davidson both rose after reporting higher profit and revenue. Carter's rose 6 percent to $64.12. Harley rose more than 2 percent to $54.31. Profit and revenue also jumped at the cruise line Royal Caribbean as more people booked vacations. The stock jumped more than 5 percent, rising to $36.07. This year's comparisons, however, are a bit unusual: Last year's results were hurt because of the sinking of the Costa Concordia, owned by rival cruise line Carnival. Profit and revenue also rose at 3M, maker
of Scotch tape and construction equipment, but the stock fell almost 3 percent to $104.88. Investors were unnerved when the company cut its profit predictions for the year, citing a "low-growth economic environment." Cosmetics company Revlon reported a loss after taking a charge for refinancing, and revenue was virtually flat. The stock dropped nearly 7 percent to $19.16. Profit and revenue also fell at Cliffs Natural Resources and Carbo Ceramics, but their stocks went in opposite directions. Cliffs, which sells iron ore, shot 15 percent higher to $20.95. Carbo, which provides services and parts for the petroleum industry, plunged more than 17 percent to $71.55. In other markets, trading resumed on the Chicago Board of Options Exchange close to 1 p.m. Eastern after being shut down all morning because of software problems. The CBOE's VIX index, a measure of how volatile investors expect the market to be, was virtually unchanged at 13.62, close to its low point of the year, 11, reached on March 15. Gold futures rose 2.7 percent to $1,462 an ounce and the price of crude oil rose 2.4 percent to $93.64 a barrel. The yield on the benchmark 10-year Treasury note was unchanged at 1.71 percent.
At Cliffs, the lower profits were still better than analysts had expected. At Carbo, investors were worried because the company said Chinese ceramic imports were hurting its pricing, and because drilling companies were taking more rigs out of action.
[Associated
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