Market Overview

Market Wrap For February 26: Markets Slightly Higher On Housing Data

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U.S. stocks ended the day in positive territory following a volatility trading session in which the Nasdaq index hit a 14 year high and the S&P 500 index was pushed back in to record territory.

Investors found housing data to be encouraging news as the three major indices finished the day in positive territory with small gains.

  • The Dow gained 0.12 percent, closing at 16,198.41.
  • The S&P 500 gained 0.00 percent closing at 1,845.16.
  • The Nasdaq gained 0.10 percent, closing at 4,292.06.
  • Gold lost 1.01 percent, trading at $1,329.20 an ounce.
  • Oil rose 0.69 percent, trading at $102.53 a barrel.
  • Silver lost 3.41 percent, trading at $21.22 an ounce.

News of Note

MBA Mortgage Applications declined 8.5 percent compared to a decline of 4.1 percent last week.

January New Home Sales totaled 468,000, above the 400,000 expectation with a prior revised reading of 427,000.

Crude EIA Petroleum Inventories rose 0.1 million barrels while Gasoline declined 2.8 million barrels.

David Camp, the Republican Chairman of the House Committee on Ways & Means plans to introduce proposals to simplify what he considers to be an “appalling tax code.” Camp wants to implement only two tax brackets, ten percent and 25 percent and cut the corporate income rate to 25 percent from 35 percent.

The United Kingdom confirmed that its fourth quarter GDP grew 0.7 percent in the fourth quarter, slightly lower than the 0.8 percent growth seen in the third quarter. On year, GDP has risen 2.7 percent.

Notable upgrades and downgrades

Analysts at RBC Capital Markets upgraded LinkedIn (NYSE: LNKD) to Outperform from Sector perform with a price target raised to $250 from $225. Shares gained 1.21 percent, closing at $212.37.

Analysts at JPMorgan resumed coverage of Kroger (NYSE: KR) with an Overweight rating and $46 price target. Shares gained 0.93 percent, closing at $40.02.

Related: 3 Reasons To Be Bullish About Food Stocks

Analysts at Nomura maintained a Neutral rating on JPMorgan (NYSE: JPM) with a price target raised to $65 from a previous $63. Shares lost 0.53 percent, closing at $56.73.

Analysts at Wells Fargo upgraded Ralph Lauren (NYSE: RL) to Outperform from Market perform with a price target raised to a range of $186 to $197 from a previous range of $166 to $171. Shares gained 1.32 percent, closing at $162.10.

Analysts at Piper Jaffray downgraded Juniper Networks (NYSE: JNPR) to Neutral from Overweight with an unchanged price target of $28. Shares lost 0.78 percent, closing at $26.88.

Analysts at Piper Jaffray downgraded DreamWorks Animation (NASDAQ: DWA) to Underweight from Neutral with a price target unchanged at $19. Shares lost 12.19 percent, closing at $30.91.

Equities-Specific News of Note

As Tesla (NASDAQ: TSLA) moves forward with its “gigafactory” plans, the company may have found a partner. Panasonic is interested in investing 100 billion yen, or $979 million. Tesla already has a relationship with Panasonic who is the primary supplier of lithium-ion batteries for Tesla's cars. Shares hit new 52 week highs of $265.00 before closing the day at $253.02, up 2.02 percent.

Related: Tesla, In Talks With Panasonic, Makes Pricing Appeal To Chinese Consumers

Apache (NYSE: APA) said it plans to spend $8.5 billion on exploration and production in 2014, 64 percent of which will be allocated towards drilling more profitable oil wells onshore in North America. Shares lost 3.94 percent, closing at $79.82.

Tupperware (NYSE: TUP) set a goal to see at least 80 percent of its revenue coming from emerging markets by 2019. Shares gained 0.81 percent, closing at $78.01.

A judge in Delaware has granted Men's Wearhouse (NYSE: MW) lawsuit against Jos. A. Bank (NASDAQ: JOSB) fast-track status. Men's Wearhouse wants to stop Jos. A. Bank from acquiring Eddie Bauer. Shares of Men's Wearhouse gained 2.92 percent, closing at $2.92 percent while Jos. A. Bank hit new 52 week highs of $60.32 before closing the day at $59.95, up 1.99 percent.

Carl Icahn issued a new letter to eBay (NASDAQ: EBAY) reiterating his previous letter in which the famed activist investor accuses eBay's management to be dysfunctional. Icahn also criticized board members such as Marc Andreesen and Scott Cook as being “value-driven for themselves.” Shares gained 2.12 percent, closing at $57.34.

Best Buy (NYSE: BBY) announced that as many as 2,000 managers (product and stores) could see their position terminated as part of a cost-cutting operation. Shares gained 2.02 percent, closing at $25.82.

Related: Best Buy Earnings Preview: Has The Turnaround Failed?

Netflix (NASDAQ: NFLX) will begin production on its Marvel superhero series this summer in New York. Shares of Netflix lost 0.94 percent, closing at $448.79.

Sinopec (NYSE: SNP) said that it will reveal additional restructuring measures next month after previously announcing it is seeking private investors for as much as 30 percent of its oil retail unit. Shares gained 3.40 percent, closing at $84.87.

Google (NASDAQ: GOOG) said that it has never made an offer to buy WhatsApp despite several media reports saying that Google offered $10 billion for the mobile messaging service. Shares hit new 52 week highs of $1,228.88 before closing the day at $1,220.71, up 0.06 percent.

Russia's largest search engine Yandex (NASDAQ: YNDX) has inked an agreement of cooperation with Google. Under the agreement, Google's advertising clients will gain access to Yandex's advertising inventory and vice verca. The partnership will result in a larger number of advertising bids which will boost revenue for the all-important advertising spaces in search results. Shares of Yandex gained 4.34 percent, closing at $37.77.

According to analysts at Mizuho, Apple (NASDAQ: AAPL) could release its iPhone 6 in July based on checks with Asian vendors and suppliers. Shares lost 0.91 percent, closing at $517.37.

Related: Samsung's Latest Anti-Apple Weapon: The Galaxy S5

Novartis (NYSE: NVS) confirmed that it will shut its R&D facility in Horsham, England by the end of June as part of its global reorganization in cutting down the company's $7 billion budget. Shares lost 0.45 percent, closing at $83.42.

Winners of Note

This morning, Abercombie & Fitch (NYSE: ANF) reported its fourth quarter results and announced an EPS of $1.34, beating the consensus estimate of $1.05 million. Revenue of $1.3 billion beat the consensus estimate of $1.29 billion. Net income for the quarter fell to $66.1 million from $157.2 million in the same quarter last year. The company also approved an accelerated $150 million share accelerated repurchase plan to be executing during the first quarter. Shares gained 11.25 percent, closing at $40.04.

This morning, Target (NYSE: TGT) reported its fourth quarter results. The company announced an EPS of $1.30, beating the consensus estimate of $0.82. Revenue of $21.52 billion beat the consensus estimate of $21.46 billion. Net earnings for the quarter totaled $520 million, compared to $961 million in the same quarter last year. Revenue at stores open at least a year fell 2.5 percent as the company said that customers were hesitant to return following the massive data breach. Shares gained 7.04 percent, closing at $60.49.

Related: Target's Positive Quarterly Results Catch Some Investors Off-Guard

Plug Power (NASDAQ: PLUG) said it has received a multi-site GenKey purchase order from Wal-Mart to launch its hydrogen fuel cell solutions to power electric lift truck fleets at several of Wal-Mart's distribution centers. Shares gained 13.08 percent, closing at $4.41.

Anika Therapeutics (NASDAQ: ANIK) received FDA approval for the company's Monovisc single injection for pain caused by osteoarthritis of the knee. Shares hit new 52 week highs of $52.49 before closing the day at $45.90, up 33.16 percent.

Decliners of Note

Last night, Sturm, Ruger & Company (NYSE: RGR) reported its fourth quarter results. The company announced an EPS of $1.33, missing the consensus estimate of $1.38. Revenue of $181.9 million beat the consensus estimate of $179.15 million. Net income for the quarter totaled $111.27 million compared to $70.63 million in the same quarter last year. After paying $5.80 in dividends to shareholders in 2012, the company finished 2013 only paying out $2.12 in dividends. Investors also noted that the company's free cash flow generated in 2013 amounted to only $65.1 million, less than a nine percent appreciation over 2012 levels. Shares lost 8.06 percent, closing at $62.86.

This morning, DigitalGlobe (NYSE: DGI) reported its fourth quarter results. The company announced an EPS of $0.18, beating the consensus estimate of $0.07. Revenue of $169.7 million missed the consensus estimate of $185.92 million. Net income for the quarter was $15.1 million compared to $17.1 million in the same quarter last year. The company issued downside guidance and sees its 2014 revenues to be $630 million to $660 million, below the consensus estimate of $710.3 million. The company offered no explanation for the revenue miss or downside guidance. Shares lost 27.29 percent, closing at $29.90.

Recommended: Amazon's Dirty Little Secret

The Ocwen (NYSE: OCN) web of companies are under selling pressure as the New York Department of Financial Services commented on potential conflicts of interest between Ocwen and Altisource Residential (NYSE: RESI), Altisource Portfolio Solutions (NYSE: ASPS), Altisource Asset Management (NYSE: AAMC), and Home Loan Servicing Solutions (NYSE: HLSS). The Financial Services department issued a letter to Ocwen's general counsel which stated “this tangled web of conflicts could create incentives that harm borrowers and push homeowners unduly into foreclosure.” Shares of Ocwen lost 6.98 percent, closing at $36.76 while Altisource Residential lost 7.38 percent, closing at $26.72, Altisource Portfolio Solutions lost 13.50 percent, closing at $101.00. Altisource Asset Management lost 16.03 percent, closing at $770.00 and Home Loan Servicing Solutions lost 2.17 percent, closing at $20.69.

Earnings of Note

This morning, Lowe's (NYSE: LOW) reported its fourth quarter results. The company announced an EPS of $0.31, in-line with the consensus estimate. Revenue of $11.66 billion missed the consensus estimate of $11.69 billion. Net earnings for the quarter totaled $306 million, compared to $288 million in the same quarter last year. Comparable-store sales rose 3.9 percent in the period and gross margin improved 40 bps to 34.67 percent. Lowe's announced it will increase its share buyback program by an addition $5 billion. The company issued mixed guidance and sees its 2015 EPS to be $2.60, lower than the consensus estimate of $2.65. Revenue is guided to be approximately $56.09 billion, lower than the consensus estimate of $56.2 billion. Shares gained 5.43 percent, closing at $50.72.

This morning, Dollar Tree (NASDAQ: DLTR) reported its fourth quarter results. The company announced an EPS of $1.02, missing the consensus estimate of $1.06. Revenue of $2.23 billion missed the consensus estimate of $2.27 billion. Net income for the quarter declined to $213 million from $228.6 million in the same quarter last year. Operating margin for the quarter grew from 12.4 percent a year ago to 15.6 percent while comparable store sales increased 1.2 percent, on top of a 2.4 percent increase for the same quarter last year. The company downside guidance and forecasts its first quarter EPS to be $0.63 to $0.68, lower than the consensus estimate of $0.69. For full year 2015 the company is forecasting its EPS to be $2.91 to $3.13, below the consensus estimate of $3.31. Shares gained 4.95 percent, closing at $55.29.

This morning, SodaStream (NASDAQ: SODA) reported its fourth quarter results. The company announced an EPS of $0.16, beating the consensus estimate of $0.14. Revenue of $168.1 million beat the consensus estimate of $167.33 million. Gross margin fell 1600 bps in the quarter to 42.4 percent from 53.0 percent in the same quarter last year as the company took foreign exchange rate hits and sold products at lower selling prices near the end of the year. Net income for the quarter totalled $0.7 million compared to $7.5 million in the same quarter last year. The company issued downside guidance and sees its full year 2014 revenue to be approximately $647.1 million, lower than the consensus estimate of $659.58 million. Shares gained 0.23 percent, closing at $39.17.

This morning, Barnes & Noble (NYSE: BKS) reported its third quarter results. The company announced an EPS of $0.86, beating the consensus EPS of $0.58. Revenue of $2 billion missed the consensus estimate of $2.04 billion. Same-store sales declined 0.5 percent in the quarter but the company saw a 12 percent increase in comp sales for educational toys and games. Consolidated net earnings for the quarter were $63.2 million, compared to a net loss of $3.7 million in the same quarter last year. The company reaffirmed its previously issued guidance in which it expects retail comparable store sales to decline in the high single digits, Core Retail sales to decline in the low to mid-single digits and college store sales to decline in the low single digits. Shares gained 4.23 percent, closing at $18.47.

This morning, TJX Companies (NYSE: TJX) reported its fourth quarter results. The company announced an EPS of $0.81, missing the consensus estimate of $0.83. Revenue of $7.81 billion missed the consensus estimate of $7.86 billion. Comparable-store sales rose 3.0 percent in the U.S. but profit margin fell 100 bps to 27.6 percent as pricing and competitive issues took a toll. Net income for the quarter totaled $582.29 million compared to $604.84 million in the same quarter last year. The company said that it plans to purchase $1.6 billion to $1.7 billion in stock during the fiscal year. The company authorized a new $2 billion stock buyback allowance with no time limit as the company only has $970 million remaining on its existing program. Shares lost 1.15 percent, closing at $60.29.

After the market closed, Noodles & Company (NASDAQ: NDLS) reported its fourth quarter results. The company announced an EPS of $0.11, missing the consensus estimate of $0.12. Revenue of $91.5 million missed the consensus estimate of $92.52 million. Shares were trading lower by 12.26 percent at $34.70 following the earnings release.

After the market closed, J.C. Penney (NYSE: JCP) reported its fourth quarter results. The company announced an EPS of -$0.68, beating the consensus estimate of -$0.85. Revenue of $3.78 billion missed the consensus estimate of $3.85 billion. Shares were trading higher by 4.03 percent at $6.20 following the earnings release.

Quote of the Day

"If money is all you love, then that's what you'll receive." - Princess Leia (Star Wars, A New Hope, Episode 4)

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