Market Overview

Market Wrap For March 12: Nasdaq Ends Losing Streak, Dow Mildly Lower

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U.S. stocks were little changed as investors found no new positive (or negative) developments from Ukraine and no new economic reports from China.

Stanley Fischer, the nominee for Federal Reserve vice chairman will deliver a prepared testimony ahead of his confirmation at the Senate Banking Committee Thursday. Fischer will argue that the unemployment rate at 6.7 percent is too high and further central-bank accommodation measures are required.

  • The Dow lost 0.07 percent, closing at 16,340.08.
  • The S&P 500 gained 0.03 percent, closing at 1,868.20.
  • The Nasdaq gained 0.37 percent, closing at 4,323.33.
  • Gold gained 1.77 percent, trading at $1,371.20.
  • Oil lost 2.06 percent, trading at $97.97 a barrel.
  • Silver gained 2.50 percent, trading at $21.33

News of Note

MBA Mortgage Applications composite index declined 2.1 percent compared to a gain of 9.4 percent last week.

EIA Petroleum Inventories showed that Crude rose by 6.2 million barrels, Gasoline declined by 5.2 million barrels and Distillates declined by 0.5 million barrels.

Recommended: China's Weak Data Outweighs Concern Over Ukraine, Brent Slides

Analyst Upgrades and Downgrades of Note

Analysts at Deutsche Bank downgraded American International Group (NYSE: AIG) to Hold from Buy with a price target lowered to $55 from a previous $58. Shares lost 1.17 percent, closing at $49.94.

Analysts at Nomura maintained a Neutral rating on American Eagle Outfitters (NYSE: AEO) with a price target lowered to $13 from a previous $14. Shares hit new 52 week lows of $12.56 before closing the day at $12.75, down 2.67 percent.

Analysts at Credit Suisse added Chevron (NYSE: CVX) to its Focus List with a price target of $140. Shares gained 0.98 percent, closing at $115.63.

Analysts at Bank of America maintained a Buy rating on Coty (NASDAQ: COTY) with a price target raised to $17 from a previous $16. Shares gained 1.51 percent, closing at $15.44.

Analysts at Stifel Nicolaus maintained a Buy rating in FuelCell Energy (NASDAQ: FCEL) with a price target raised to $4.10 from a previous $2.30. Shares gained 2.74 percent, closing at $3.37.

Analysts at Goldman Sachs upgraded McKesson (NYSE: MCK) to Conviction Buy from Buy with a price target raised to $215 from a previous $208. Shares gained 0.69 percent, closing at $183.62.

Analysts at Nomura initiated coverage of Mellanox Technologies (NASDAQ: MLNX) with a Buy rating and $48 price target. Shares gained 0.56 percent, closing at $37.60.

Analysts at Credit Suisse upgraded Petrobras (NYSE: PBR) to Neutral from Underperform with a $14 price target. Shares gained 1.39 percent, closing at $10.69.

Analysts at Goldman Sachs upgraded Rite-Aid (NYSE: RAD) to Buy from Neutral with a price target raised to $8 from a previous $5. Shares hit new 52 week highs of $6.95 before closing the day at $6.91, up 7.38 percent.

Recommended: Retailers And Weather: Who Survived The Brutal Start To 2014?

Analysts at BNP Paribas initiated coverage of SOHU (NASDAQ: SOHU) with a Hold rating and $82 price target. Shares gained 0.28 percent, closing at $76.48.

Analysts at Credit Suisse downgraded Toll Brothers (NYSE: TOL) to Neutral from Outperform with a $39 price target. Shares lost 0.58 percent, closing at $37.78.

Analysts at Barclays downgraded Urban Outfitters (NASDAQ: URBN) to Equal-weight from Overweight with a price target lowered to $38 from a previous $50. Shares lost 1.72 percent, closing at $35.29.

Analysts at Deutsche Bank upgraded VeriFone (NYSE: PAY) to Hold from Sell with a price target raised to $29 from a previous $18. Shares hit new 52 week highs of $32.94 before closing the day at $32.47, up 11.01 percent.

Analysts at Goldman Sachs maintained a Conviction Buy on Walgreen (NYSE: WAG) with a price target raised to $79 from a previous $67.

Equities-Specific News of Note

The Department of Justice is commencing an investigation in to General Motors (NYSE: GM) to determine if the company is criminally liable in its failure to report ignition switch problems. Shares lost 0.94 percent, closing at $34.85.

Related: Congress Steps In To Investigate General Motors And NHTSA

Google (NASDAQ: GOOG) acquired some of the assets of Green Throttle Games, a maker of Bluetooth game controllers for Android hardware. Shares gained 0.61 percent, closing at $1,207.30.

JetBlue (NASDAQ: JBLU) reported that its February traffic increased 5.2 percent and passenger revenue per available seat mile rose seven percent. Shares gained 0.23 percent, closing at $8.75.

Tesla (NASDAQ: TSLA) has hired Simon Sproule as the company's VP communications. Sproule comes from Renault-Nissan where he was the director of communications. Shares gained 3.02 percent, closing at $241.49.

Shares of Pfizer (NYSE: PFE) were briefly halted as a Virginia court granted a summary judgement invalidating Pfizer's reissue patent for the dominant ingredient in Celebrex. Shares lost 1.36 percent, closing at $31.98.

According to The Wall Street Journal, Liberty Global (NASDAQ: LBTYA) is on the shopping block for more acquisitions and is eyeing the European market. Shares gained 0.61 percent, closing at $44.31.

Teva Pharmaceutical (NASDAQ: TEVA) settled its illegal kickback scheme case with the U.S. Department of Justice and has agreed to pay $27.6 million. Shares lost 0.97 percent, closing at $48.78.

Recommended: BioMarin, Medivation Buck Biotech Short Interest Trend

CSX Corporation (NYSE: CSX) issued a warning that winter weather will reduce its earnings by ten cents in the first quarter. Shares gained 0.14 percent, closing at $28.88.

Microsoft (NASDAQ: MSFT) named activist investor Value Act's President to the company's board and audit committee. Mason Morfit's Value Act owns a $2 billion stake in Microsoft. Shares gained 0.66 percent, closing at $38.27.

Winners of Note

SolarCity (NASDAQ: SCTY) announced that it will occupy space in 60 Best Buy stores across Arizona, California, Hawaii, New York and Oregon. Shares of SolarCity gained 7.02 percent, closing at $78.50.

Energy XXI (NASDAQ: EXXI) has agreed to acquire EPL Oil & Gas (NYSE: EPL) for $39 a share, valuing the deal at $2.3 billion. According to Energy XXI's CEO John Schiller, the absorption of EPL would create ““the only publicly traded pure play on the Gulf of Mexico shelf, with the highest concentration of large, mature oilfields ever owned by a single shelf operator." Energy XXI will pay $25.35 in cash plus 0.584 of its own shares that closed at $23.37 on Tuesday. Shares of Energy XXI lost 7.83 percent, closing at $21.54 while EPL surged 28.82 percent, closing at $37.50.

Vipshop Holdings (NASDAQ: VIPS) announced will sell $550 million worth of convertible senior notes due 2019 with an interest rate of 1.5 percent and a conversion price of $201.24. Shares gained 7.97 percent, closing at $155.19.

Decliners of Note

The FDA put Geron's (NASDAQ: GERN) IND application for imetelstat on full clinical hold. The company can no longer proceed with its Phase 2 trial. Geron noted that the FDA's intervention is “"due to the occurrence of persistent low-grade liver function test (LFT) abnormalities observed in the phase 2 study of imetelstat in [essential thrombocythemia] patients and the potential risk of chronic liver injury following long-term exposure to imetelstat. The FDA was also concerned whether or not these abnormalities will be reversible." Shares plunged 61.59 percent, closing at $1.69.

Shares of Herbalife (NYSE: HLF) were halted around 1:40 pm EST. It was revealed that the company was served with a Civil Investigative Demand from the Federal Trade Commission. Herbalife issued a statement and said that it will cooperate with the investigation. Shares lost 7.37 percent, closing at $60.57 but traded as low as $54.59.

Related: Herbalife Discloses FTC Demand for Civil Investigation, Shares Nose Dive

This morning, Express (NASDAQ: EXPR) reported its fourth quarter results. The company announced an EPS of $0.57, missing the consensus estimate of $0.59. Revenue of $715.9 million missed the consensus estimate of $722.02. Net income for the quarter fell to $47.9 million from $63.9 million in the same quarter last year while gross margin fell 300 bps to 32 percent due to a heavy promotional environment. Comparable store sales rose one percent in the quarter while the e-commerce channel saw a 14 percent gain. Express issued downside guidance and sees its first quarter EPS to be $0.12 to $0.18, well below the consensus estimate of $0.41. Shares fell to new 52 week lows of $15.51 before closing the day at $16.05, down 12.01 percent.

Earnings of Note

This morning, Dresser-Rand (NYSE: DRC) reported its fourth quarter results. The company announced an EPS of $1.24, missing the consensus estimate of $1.29. Revenue of $851 million missed the consensus estimate of $1.10 billion. Net income for the quarter fell to $32.8 million from $80.2 million in the same quarter last year partly due to the impact of a previously disclosed draft Spanish regulation which reduced the operating income by $62 million. Dresser-Rand issued downside guidance and sees its full year 2014 EPS to be $2.60 to $2.80, below the consensus estimate of $3.11. Revenue is guided to be $2.9 billion to $3.1 billion versus a consensus estimate of $3.1 billion. Shares lost 1.90 percent, closing at $56.25.

After the closing bell, Williams-Sonoma (NYSE: WSM) reported its fourth quarter results. The company announced an EPS of $1.38, beating the consensus estimate of $1.35. Revenue of $1.46 billion beat the consensus estimate of $1.43 billion. Shares were trading higher by 6.82 percent at $62.99 following the earnings report.

Quote of the Day

“Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC. We are confident that Herbalife is in compliance with all applicable laws and regulations. Herbalife is a financially strong and successful company, having created meaningful value for shareholders, significant opportunities for distributors and positively impacted the lives and health of its consumers for over 34 years. Herbalife does not intend to make any additional comments regarding this matter unless and until there are material developments.” - Herbalife's statement following receipt of a Civil Investigative Demand from the Federal Trade Commission

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