Schaeffer's Daily Market Blog Features: American Greetings, Topps, Merck, Papa John's International, and General Electric

American Greetings (NYSE:AM) announced this morning that it suffered a loss in the second quarter of $10.5 million, or 18 cents per share, compared to its year-ago profit of $3.2 million, or five cents. The company's loss from continuing operations came to 23 cents per share, worse than the Street estimate for a loss of 16 cents. Sales for the quarter dropped to $360.1 million. The firm stated that the results were below its own expectations, and were hurt by costs to rollout changes to its card products and merchandising, as well as the seasonality of its business.

The shares have gapped lower on the open, losing close to nine percent. The security had been in a nice uptrend from its July lows, but is now resting below support at its 10-week and 20-week moving averages. However, the stock has potential support at its 10-month moving average near the 22 level.

9:43 AM Topps Posts Strong Earnings

Topps (NASDAQ:TOPP) banked a second-quarter profit of $3.4 million, or eight cents per share. Excluding non-recurring items, earnings would have increased to 12 cents per share, as sales for the quarter climbed nearly 10 percent to $82.3 million. The company witnessed a 30-percent jump in sales at its entertainment unit, which helped offset a 5.8-percent decline in confectionary sales. Looking ahead, the firm still expects fiscal 2007 earnings, excluding items, of 25 to 30 cents per share.

After gapping higher on the open, the shares have pulled back to support at their converging 10-day and 20-day moving averages near the nine level. The stock has recently had trouble holding onto support at these trendlines after using them as stellar support from late July through mid-September. However, it appears that the stock still has support in the form of its ascending 10-week moving average climbing into the region.

10:41 AM NYSE & NASDAQ New Highs - New Lows With Scorecard

We're looking at more than 30 stocks today that sport "extreme" ratings on our Schaeffer's Equity Scorecard. Two of the potential bullish picks are Merck (NYSE:MRK) and Papa John's International (NASDAQ:PZZA), both of which earn Scorecard ratings of 8.0, suggesting the possibility of future upside.

11:28 AM GE Wins Contract

This morning, General Electric (NYSE:GE) announced that it has signed a contract to supply 310 Evolution series locomotives for Kazakhstan's national railway company, Kazakhstan Temir Zholy. The contract is valued at more than $650 million, and under terms of the deal, GE will manufacture and ship 10 Evolution locomotives in 2008. Production and delivery of key components for 300 additional locomotives will take place from 2008 through 2012, with final assembly taking place at a new assembly plant in Pavlodar, Kazakhstan.

The shares have been in a nice uptrend along their 10-day and 20-day moving averages since mid-August. Furthermore, the equity is poised to close above its 10-month and 20-month moving averages for the second time this year. However, the security remains one of the biggest laggards of the Dow Jones Industrial Average (DJIA). On a year-to-date basis, the stock has increased only one percent, while the Dow is up more than nine percent. In addition, of the 30 components in the DJIA, only six others have a worse year-to-date record.