Market Wrap For March 21: Markets End Friday On A Negative Note, But Still Positive For The Week
U.S. stocks slipped to negative territory aided in part by Friday being a quadruple witching trading session.
Major indices sold off in the afternoon as investors likely took some chips off the table going in to an uncertain weekend with the situation in Ukraine far from resolved.
The S&P 500 hit a new intra-day all time high of 1,883.97 before reversing course and ending the day slightly lower on no major market moving news.
- The Dow lost 0.16 percent, closing at 16,305.14.
- The S&P 500 lost 0.29 percent, closing at 1,866.60.
- The Nasdaq lost 0.98 percent, closing at 4,276.79.
- Gold gained 0.35 percent, trading at $1,335.10 an ounce.
- Oil gained 0.50 percent, trading at $99.39 a barrel.
- Silver lost 0.56 percent, trading at $20.32 an ounce.
News of Note
Atlanta Fed Business Inflation Expectations came in at +1.8 percent, lower than the previous expectation of +2.0 percent.
Fitch reiterated the United States with an AAA rating and raised the outlook to stable.
Jeff Currie, head of commodities research at Goldman Sachs reiterated his $1,050 per ounce price target on gold. Currie cited economic slowdown induced by weather, Chinese credit concerns and tensions in Ukraine is reasons to stick with his previous forecast.
Analyst Upgrades and Downgrades of Note
Analysts at Macquarie initiated coverage of Apple (NASDAQ: AAPL) with an Outperform rating and $630 price target. Shares gained 0.79 percent, closing at $532.87.
Analysts at Goldman Sachs downgraded Boeing (NYSE: BA) to Neutral from Buy with a price target lowered to $134 from a previous $155. Shares lost 0.89 percent, closing at $122.63.
Analysts at HSBC downgraded China Mobile (NYSE: CHL) to Neutral from Overweight. Shares hit new 52 week lows of $41.35 before closing the day at $41.55, down 3.17 percent.
Analysts at Nomura maintained a Buy rating on Freeport McMoRan (NYSE: FCX) with a Buy rating and a price target lowered to $43 from a previous $45. Shares gained 4.53 percent, closing at $32.30.
Analysts at Argus Research downgraded Herbalife (NYSE: HLF) to Hold from Buy. Shares lost 2.30 percent, closing at $49.62.
Analysts at DA Davidson maintained a Neutral rating on Nike (NYSE: NKE) with a price target raised to $82 from a previous $80. Shares lost 5.11 percent, closing at $75.22.
Analysts at CLSA initiated coverage of NVIDIA (NASDAQ: NVDA) with an Underperform rating and $19 price target. Shares lost 0.32 percent, closing at $18.51.
Analysts at Argus Research maintained a Buy rating on SanDisk (NADSAQ: SNDK) with a price target raised to $92 from a previous $80. Shares hit new 52 week highs of $82.55 before closing the day at $80.10, down 0.77 percent.
Analysts at Goldman Sachs upgraded United Technologies (NYSE: UTX) to Buy from Neutral with a price target raised to $138 from a previous $123. Shares gained 0.71 percent, closing at $114.58.
Analysts at Janney Capital maintained a Buy rating on VMware (NASDAQ: VMW) with a Buy rating and a price target raised to $130 from a previous $105. Shares hit new 52 week highs of $111.41 before closing the day at $109.29, down 1.25 percent.
Analysts at Morgan Stanley maintained an Overweight rating on Walter Energy (NYSE: WLT) with a price target lowered to $27 from a previous $33. Shares gained 3.30 percent, closing at $7.51.
Analysts at Cantor Fitzgerald downgraded Walgreen (NYSE: WAG) to Sell from Hold with a $50 price target. Shares lost 2.48 percent, closing at $64.85.
Equities-Specific News of Note
A senate panel is investigating Caterpillar (NYSE: CAT) for allegedly dodging U.S. taxes. The Permanent Subcommittee on Investigations plans to begin hearings in early April. Shares hit new 52 week highs of $97.63 before closing the day at $97.32, up 1.16 percent.
E-House Holdings (NYSE: EJ) revealed that Tencent has paid $180 million for 15 percent of its online real estate service provider Leju Holdings. Shares of E-House lost 0.99 percent, closing at $12.96.
Last night, Discover Financial Services (NYSE: DFS) announced a $1.6 billion buyback program and plans to boost its quarterly dividend to $0.24 from $0.20. Shares hit new 52 week highs of $60.00 before closing the day at $57.78, down 1.60 percent.
Wellpoint (NYSE: WLP) raised its net income per share projection to $8.20 from a previous $8.00, citing an increase in enrollment of one million to 1.3 million new members. Shares hit new 52 week highs of $102.56 before closing the day at $99.72, up 0.01 percent.
According to CNBC, Wal-Mart (NYSE: WMT) is looking to take market share in the home improvement sector by slashing prices and offering a great product assortment in its outdoor living and lawn and garden segments. Shares gained 1.47 percent, closing at $76.49.
AK Steel (NYSE: AKS) warned that it expects to report a loss of $0.44 to $0.49 per share when it will announce its first quarter results on April 22. The company announced that the average selling price for the first quarter will increase by approximately six percent to $1,095, above its average selling price of $1,031 per ton in the fourth quarter of 2013. Shares gained 4.18 percent, closing at $6.98.
Mosaic's (NYSE: MOS) CEO James Prokopanko said that he will resume his regular work schedule despite being diagnosed with cancer and undergoing chemotherapy. Shares lost 0.77 percent, closing at $48.66.
Vringo (NASDAQ: VRNG) will present its case in a U.S. federal appeals court on May 6 in its infringement suit against Google, AOL and several other firms. Shares gained 2.48 percent, closing at $3.72.
General Motors' (NYSE: GM) CEO Mary Barra will testify to The House Energy & Commerce Committee on April 1. Shares lost 0.94 percent, closing at $34.93.
Three Democratic members of the House Committee on Energy and Commerce said that they were concerned over Gilead Sciences' (NASDAQ: GILD) plans to charge $84,000 per treatment of Sovaldi. The members said they were concerned that Sovalidi would not be able to cure patients if the patients cannot afford the drug. Shares lost 4.57 percent, closing at $72.07.
President Obama could possibly be giving up his BlackBerry (NASDAQ: BBRY) device. The White House is testing Samsung and LG Electronic smartphone for use in the White House. Separately, BlackBerry will sell more than three million square feet of its Canadian office space and vacant lands but promises to keep a strong presence in Canada and its home-town of Waterloo Ontario. Shares of BlackBerry lost 2.55 percent, closing at $9.18.
Winners of Note
Endocyte (NASDAQ: ECYT) announced that a Phase 2b TARGET trial has met the primary endpoint for the combination of vintafolide (EC145/MK-8109) and docetaxel in folate receptor (FR)-positive recurrent non-small cell lung cancer (NSCLC) patients. "We are pleased with the results of this study, as the vintafolide/docetaxel combination showed meaningful activity in patients with recurrent NSCLC, meeting the primary endpoint of the trial," said Binh Nguyen, M.D., Ph.D., vice president of medical affairs at Endocyte. "This is our second randomized study in a very challenging indication, where vintafolide has met the primary endpoint when used in patients selected with the companion imaging agent etarfolatide." Shares hit new 52 week highs of $33.70 before closing the day at $28.17, up 92.42 percent.
Lin Media (NYSE: LIN) will be acquired by Media General (NYSE: MEG) in a $1.6 billion deal. The combined entity will be the second largest TV broadcasting company with 74 network-affiliated owned or serviced TV stations reaching around 23 percent of U.S. households. Lin shareholders will receive $763 million in cash and 49.5 million shares of Media General priced at its 20-day average. In total, Lin shareholders will receive around $27.82 per share, a large gain compared to Lin's closing price yesterday at $14.90. Shares of Lin Media gained 22.75 percent, closing at $26.38 while Media General gained 1.61 percent, closing at $17.62.
InterMune (NADSAQ: ITMN) shares rose after data showed that a rival firm, German based Boeiringer suffered a setback in two late-stage trials which showed that its nintedanib drug fell short of meeting its key secondary goals of improving overall health in lung cancer patients. InterMune recently completed a late-stage trial of its pirfenidone drug which fared better. 16.5 percent of patients who took the drug experienced disease progression, half of those who were given a placebo. Shares gained 5.33 percent, closing at $34.60 but traded as high as $38.29.
Decliners of Note
On Thursday, Symantec (NASDAQ: SYMC) announced that its CEO Steve Bennett has been relieved of his duties. Bennett's tenure with the company lasted less than two years as the company has underperformed as of late with a series of disappointing earnings and ongoing share losses. Daniel Schulman, chairman of Symantec said that Bennett's firing “was the result of an ongoing deliberative process, and not precipitated by any event or impropriety.” Michael Brown has been named interim CEO. This morning, seven major analyst firms downgraded shares, including analysts at MKM who noted that company faces “another multi-year period of upheaval, management turnover and strategic uncertainty as it tries to re-position and transform a largely legacy business of security and infrastructure software and services." Shares hit new 52 week lows of $17.95 before closing the day at $18.20, down 12.94 percent.
EnLink Midstream Partners (NYSE: ENLK) announced a secondary offering of 17.99 million units representing the holding of a limited partner GSO Crosstext Holdings. Total proceeds will total around $550 million and the company won't receive any of the proceeds. Shares lost 5.41 percent, closing at $30.40.
Lions Gate (NYSE: LGF) newly released Divergent film drew in $4.9 million in U.S. and Canadian ticket sales on Thursday, well below the $19.7 million the company collected in 2012 for Hunger Games. Early reviews of the film appear to be mixed but the company has already approved a sequel scheduled to release around the same time next year. Shares lost 7.85 percent, closing at $27.60.
Earnings of Note
This morning, Tiffany & Co (NYSE: TIF) reported its fourth quarter results. The company announced an EPS of $1.47, missing the consensus estimate of $1.52. Revenue of $1.29 billion missed the consensus estimate of $1.31 billion. Worldwide net sales rose five percent to $1.3 billion and comparable store sales rose six percent in the quarter. In the Americas region, total sales rose six percent to $659 million while comparable store sales rose seven percent in the quarter. Tiffany posted a net loss in the quarter of $103.6 million compared to a net profit of $179.6 million in the same quarter last year. The company noted that it took a pretax charge of $473 million related to an arbitration case against Swatch. Tiffany issued downside guidance and sees its full year 2014 EPS to be $4.05 to $4.15, below the consensus estimate of $4.28. Shares lost 0.48 percent, closing at $90.73.
This morning, Darden Restaurants (NYSE: DRI) reported its third quarter results. The company announced an EPS of $1.02, beating the consensus estimate of $1.82. Revenue of $2.23 billion missed the consensus estimate of $2.25 billion. Darden estimates that its earnings per share took a $0.07 hit due to severe weather which slowed down traffic and a $0.06 hit due to an implementation of a new strategic plan. Net earnings for the quarter fell to $109.7 million from $134.4 million in the same quarter last year. U.S. same-restaurant sales increased 0.3% at LongHorn Steakhouse, declined 5.4% at Olive Garden, declined 8.8% at Red Lobster and declined 0.7% at the Specialty Restaurant Group. Darden reaffirmed its full year fiscal 2014 guidance of a 15 percent to 20 percent decline in EPS, excluding any costs from its strategic plan that it announced in December. Shares gained 2.76 percent, closing at $50.66.
Quote of the Day
"Everybody's lookin' forward to the weekend" - Rebecca Black, Lyrics from "Friday"
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