Market Wrap For March 28: Markets Still Positive Despite Giving Up Early Gains
U.S. stocks finished the week on a positive note despite a sell-off in the afternoon. One possible reason for the sell-off is that investors are adjusting their portfolios for the end of the quarter on Monday.
Major indices rallied off the opening bell with the Dow Jones Industrial Average jumping 150 points on positive consumer spending and income data.
The Dow gained 0.36 percent, closing at 16,323.06.
The S&P 500 gained 0.46 percent, closing at 1,857.62.
The Nasdaq gained 0.11 percent, closing at 4,155.76.
Gold lost 0.13 percent, trading at $1,293.00 an ounce.
Oil gained 0.34 percent, trading at $101.62 a barrel.
Silver gained 0.44 percent, trading at $19.83 an ounce.
News of Note
February Personal Income rose 0.3 percent month-over-month, ahead of the 0.2 percent gain expected. Personal spending rose 0.3 percent month-over-month, in-line with expectations.
March Reuters/UofM Consumer Sentiment read 80.0, below expectations of 80.5.
Analyst Upgrades and Downgrades of Note
Analysts at Citigroup maintained a Buy rating on Accenture (NYSE: ACN) with a price target lowered to $88 from a previous $96.
Analysts at Citigroup maintained a Buy rating on Allergan (NYSE: AGN) with a price target raised to $140 from a previous $130. Shares gained 0.40 percent, closing at $121.01.
Analysts at Societe Generale downgraded Citigroup (NYSE: C) to Hold from Buy. Shares lost 0.44 percent, closing at $47.24.
Analysts at Citigroup maintained a Buy rating on Lululemon Athletica (NASDAQ: LULU) with a price target lowered to $61 from a previous $65. Shares gained 1.35 percent, closing at $51.89.
Analysts at Citigroup maintained a Neutral rating on Monster Beverage (NASDAQ: MNST) with a price target raised to $75 from a previous $74. Shares gained 1.36 percent, closing at $69.49.
Analysts at Miller Tabac upgraded Monsanto Company (NYSE: MON) to Buy from Hold with a price target raised to $130 from a previous $106. Shares gained 1.35 percent, closing at $112.30.
Analysts at Bank of America reinstated coverage of Royal Dutch Shell (NYSE: RDS/A) with a Neutral rating and a price target of $73.68. Shares gained 1.17 percent, closing at $73.31.
Analysts at Raymond James upgraded SolarCity (NASDAQ: SCTY) to Outperform from Market Perform with a price target of $75. Shares gained 1.05 percent, closing at $61.38.
Analysts at Citigroup maintained a Buy rating on Teva Pharmaceuticals (NASDAQ: TEVA) with a price target raised to $60 from a previous $56. Shares gained 0.63 percent, closing at $49.45.
Equities-Specific News of Note
In a $5 billion lawsuit initiated by Wal-Mart, (NYSE: WMT) the retailer is accusingVisa (NYSE: V) of setting excessive swipe fees, despite antitrust laws set up to prevent exactly that. Wal-Mart is also accusing Visa of “perpetuating the use” of fraud-prone magnetic strip cards instead of the more secure chip/PIN technology used widely in Canada. Shares of Wal-Mart lost 0.18 percent, closing at $76.00 while Visa lost 1.70 percent, closing at $212.10.
Ford (NYSE: F) announced that it will invest $500 million at its plant in Lima, Ohio to produce the new V-6 EcoBoost engine for the F-150 truck. Shares gained 1.25 percent, closing at $15.44.
"We're often experimenting with new things, but we have no plans to offer a free streaming-media service," Amazon.com (NASDAQ: AMZN) told Variety, thereby denying previous reports the company will offer a free streaming service. Shares lost 0.05 percent, closing at $338.29.
The State of New Jersey extended Tesla's (NASDAQ: TSLA) ability to directly sell its cars in the state by two weeks until April 15. After that date, Tesla would have to work out arrangements with the dealership association. Separately, the NHTSA has closed its investigation into Tesla's Model S fires. The report noted that “a defect trend has not been identified.” Shares hit new 52 week highs of $216.70 before closing the day at $212.37, up 2.44 percent.
Alcoa (NYSE: AA) announced it will cut 147,000 metric tons of capacity at two aluminum smelters in Brazil due to an increase in costs which make the plants noncompetitive. Shares lost 0.87 percent, closing at $12.48.
58.com (NYSE: WUBA) announced that it will sell two million new shares and four million shares on behalf of existing shareholders at a price of $38. Shares gained 3.01 percent, closing at $40.33.
According to AppleInsider “multiple companies are already posting bids to build out a proposed expansion" of Apple's (NASDAQ: AAPL) its Mesa, Arizona facility in which GT Advanced (NASDAQ: GTAT) will produce large amounts of sapphire. Shares of Apple lost 0.11 percent, closing at $536.86 while GT Advanced gained 2.69 percent, closing at $17.17.
PG&E (NYSE: PCG) announced late yesterday that it expected to be charged with criminal violations of the federal Pipeline Safety Act in connection with a pipeline accident in 2010 that cut through a residential neighborhood in California and killed eight people. The company claimed that criminal charges are not merited and that its employees in no way broke the Pipeline Safety Act. Shares lost 4.01 percent, closing at $41.89.
Total (NYSE: TOT) intends to seek shale gas with Sinopec (NYSE: SNP) and drill in the Anhui province. Shares of Total gained 0.69 percent, closing at $65.94 while Sinopec lost 0.65 percent, closing at $89.62.
McDonald's (NYSE: MCD) announced that it will offer customers a free coffee from March 31 to April 13 across the U.S. in what could reasonably appear to be a defensive move following Yum Brands' Taco Bell recently launching a breakfast menu. Shares of McDonald's gained 1.12 percent, closing at $97.24.
Smith & Wesson (NASDAQ: SWHC) approved a $30 million buyback program. Shares gained 2.36 percent, closing at $14.33.
Judge David Cayer has recommended that the government's lawsuit against Bank of America (NYSE: BAC) in which the bank allegedly made misstatements about mortgages be tossed out. Shares lost 0.21 percent, closing at $16.98.
Winners of Note
Various rumors resurfaced that Aria Pharmaceuticals (NASDAQ: ARIA) is a prime take-over target from Jazz Pharmaceuticals for as much as $20 a share. Shares of Aria gained 5.00 percent, closing at $7.98.
During GameStop's (NYSE: GME) earnings release yesterday, the company announced that it plans to open 300 to 400 retail stores that will have a focus outside of video games such as Apple specialty stores, AT&T prepaid stores and stores with a focus on electronic products and wearable technologies. Shares gained 8.81 percent, closing at $40.62.
Decliners of Note
An FDA report raised questions regarding Mannkind's (NASDAQ: MNKD) diabetes device Afrezza ahead of an April 1 meeting of outside advisers to the FDA. The drug has yet to be approved by the FDA as there are concerns over certain pharmacology issues that could impact Afreeza's safety and effectiveness. Shares lost 7.12 percent, closing at $4.83.
Caesars Entertainment (NYSE: CZR) announced that It will offer seven million common shares to the public to meet its debt obligations. Shares lost 7.40 percent, closing at $19.52.
Earnings of Note
This morning, BlackBerry (NASDAQ: BBRY) reported its fourth quarter results. The company announced an EPS of -$0.08, beating the consensus estimate of -$0.54. Revenue of $976 million missed the consensus estimate of $1.11 billion. The revenue breakdown for the quarter was approximately 37% for hardware, 56% for services and 7% for software and other revenue. GAAP loss from continuing operations for the quarter was $423 million as the company's cash and marketable securities fell from $3.2 billion three months ago to $2.7 billion. During the conference call, CEO John Chen said that BlackBerry will re-launch BB7 based Bold devices and three new high-end QWERTY keyboards. Chen also reiterated previous guidance that the company is aiming to be profitable in fiscal 2016 and will consider bringing BBM to PCs. Shares lost 7.07 percent, closing at $8.41.
Quote of the Day
"If I can give you one strong piece of advice, when you go away for that romantic weekend, whatever you do, do not accept or take the upgrade to the honeymoon suite." - Chef Gordon Ramsay
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