Market Wrap For April 2: Markets On Four-Day Winning Streak
U.S. stocks rose for the fourth-consecutive day as investors found plenty of positives in today's ADP National Employment Report released today.
As a result, the S&P 500 hit new all time highs of 1,893.17 while the Dow remains just a few small points away from its all time highs.
The next major test for the markets will be on Friday when the monthly government report will be released. Economists are expecting a gain of 197,000 new jobs in March, an increase from the 175,000 jobs created in February.
St. Louis Fed chief James Bullard said that he expects the first rate hike to occur in the first quarter of 2015. Bullard's timetable, by his own admission, is ahead of his FOMC peers. Bullard sees rates being in a range of 4.0 percent to 4.25 percent by the end of 2016.
- The Dow gained 0.24 percent, closing at 16,573.00
- The S&P 500 gained 0.29 percent, closing at 1,890.90.
- The Nasdaq gained 0.20 percent, closing at 4,276.46.
- Gold gained 0.77 percent, trading at $1,289.70 an ounce.
- Oil lost 0.26 percent, trading at $99.48 a barrel.
- Silver gained 1.90 percent, trading at $20.13 an ounce.
News of Note
MBA Mortgage Applications showed that Composite Index declined 1.2 percent compared to a decline of 3.5 percent last week. Purchase Index rose 1.0 percent compared to a decline of 3.0 percent last week. Refinance Index declined 8.0 percent, matching last week's decline of 8.0 percent.
March ADP Jobs Report rose 191,000, below the consensus of 193,000.
February Factory Orders rose 1.6 percent, ahead of the consensus of 1.2 percent and a prior reading of a loss of 1.0 percent.
EIA Petroleum Inventories showed that crude declined 2.4 million barrels, gasoline declined 1.6 million barrels while distillates rose 0.6 million barrels.
The U.S. House approved a bill authorizing limited sanctions against certain Russian and Ukrainian officials in addition to extending $1 billion of loan guarantees to Ukraine.
Eurozone fourth quarter GDP growth has been revised lower to 0.2 percent from a previous estimate of 0.3 percent growth.
Analyst Upgrades and Downgrades of Note
Analysts at Nomura Securities reiterated a Neutral rating on Alcoa (NYSE: AA) with a $7 price target. Shares lost 1.46 percent, closing at $12.85.
Analysts at Citigroup maintained a Neutral rating on Apollo Group (NASDAQ: APOL) with a price target raised to $35 from a previous $30. Analysts at Wells Fargo upgraded Apollo Group to Outperform from Market Perform. Shares lost 8.82 percent, closing at $32.06.
Analysts at Barclays maintained an Equal-weight rating on CBOE Holdings (NASDAQ: CBOE) with a price target lowered to $49 from a previous $50. Shares lost 1.90 percent, closing at $55.25.
Analysts at Piper Jaffray upgraded Carter's (NYSE: CRI) to Overweight from Neutral with a price target raised to $92 from a previous $74. Shares hit new 52 week highs of $79.79 before closing the day at $79.26, up 3.10 percent.
Analysts at Nomura initiated coverage of Ford (NYSE: F) with a Neutral rating and $15 price target. Shares gained 0.80 percent, closing at $16.45.
Analysts at Nomura initiated coverage of General Motors (NYSE: GM) with a Reduce rating and $32 price target. Shares gained 1.66 percent, closing at $34.91.
Analysts at CRT Capital maintained a Buy rating on Google (NASDAQ: GOOG) with a price target raised to $1,390 from a previous $710. Shares gained 0.05 percent, closing at $1,135.46.
Analysts at Goldman Sachs maintained a Buy rating on GT Advanced Technologies (NASDAQ: GTAT) with a price target raised to $24 from a previous $20. Shares gained 7.42 percent, closing at $18.67.
Analysts at JMP Securities upgraded Intuitive Surgical (NASDAQ: ISRG) to Market Outperform from Market Perform with a price target raised to $700 from a previous $320. Analysts at Bank of America maintained a Buy rating on Intuitive Surgical with a price target raised to $550 from a previous $460. Shares hit new 52 week highs of $522.50 before closing the day at $518.50, up 5.04 percent.
Analysts at Piper Jaffray downgraded The Medicines Company (NASDAQ: MDCO) to Neutral from Overweight with a price target lowered to $29 from a previous $41. Shares gained 4.33 percent, closing at $25.06.
Analysts at Barclays maintained an Overweight rating on PVH Corp (NYSE: PVH) with a price target raised to $150 from a previous $140. Shares lost 0.12 percent, closing at $125.77.
Analysts at Pareto Securities downgraded Transocean (NYSE: RIG) to Sell from Hold with a price target lowered to $40 from a previous $43. Shares gained 0.49 percent, closing at $41.41.
Equities-Specific News of Note
Amazon.com (NASDAQ: AMZN) revealed its new $99 Fire TV set-top which comes equipped with a quad-core CPU, 2GB of RAM, Wi-Fi and will support third party content, including Netflix. Amazon is promising that its TV set-top will be more user friendly compared to an Apple TV with features such as voice search support and a user interface that makes searching for content a lot quicker and easier. Additionally, the top-box will support thousands of Android games by next month. Amazon will be developing its own titles in addition to counting on developers like Electronic Arts and Take-Two Interactive, both of which are already on board. Shares of Amazon lost 0.30 percent, closing at $341.96.
General Motors' (NYSE: GM) CEO Mary Barray continues with testimonies in Washington, but will speak to U.S. Senators today. Shares gained 1.66 percent, closing at $34.91.
Tesla (NASDAQ: TSLA) announced that it has doubled its March sales in Norway which is one of the company's largest markets. Tesla delivered 1,493 Model S vehicles. Separately, Tesla announced that it will appeal its ban in New Jersey and will sue the state. Shares gained 6.14 percent, closing at $230.29.
Buffalo Wild Wings (NASDAQ: BWLD) announced during its investor day today that it is looking for franchise acquisitions to add to its portfolio. Failure to accomplish that, the company will initiate a share buyback or dividends. Shares lost 3.98 percent, closing at $145.99.
Stratasys (NASDAQ: SSYS) has agreed to buy Solid Concepts, the largest additive manufacturing service bureau in North America for $295 million in cash. The 3D maker has also acquired Harvest Technologies for an unknown sum. Shares gained 0.76 percent, closing at $111.81.
BlackBerry (NASDAQ: BBRY) announced that it will not renew T-Mobile USA's (NASDAQ: TMUS) license to sell its BlackBerry devices. Shares of BlackBerry gained 1.36 percent, closing at $8.21 while T-Mobile gained 0.03 percent, closing at $33.49.
According to TheVerge.com, Microsoft (NASDAQ: MSFT) confirmed that the Start menu will return in possible Windows 9 release which is reportedly due in April 2015. Microsoft also unveiled several Windows updates and universal apps. Shares hit new 52 week highs of $41.66 before closing the day at $41.35, down 0.17 percent.
Cheniere Energy (NYSE: LNG) will supply Spanish based Endesa with approximately 1.5 million tons per year of liquefied natural gas from its planned Corpus Christi export operations for the next 20 years with an option to extend the agreement for an addition ten years. Shares hit new 52 week highs of $59.25 before closing the day at $57.67, up 0.14 percent.
Consolidated Edison (NYSE: ED) is estimating that it will take four decades and $10 billion to replace its aging iron and unprotected steel gas pipelines that from a large part of its infrastructure. Shares gained 0.90 percent, closing at $53.59.
According to The Wall Street Journal, the recent drop in Comcast (NASDAQ: CMCSA) shares over the last several weeks has complicated its merger ambitions with Time Warner. (NYSE: TWC) Comcast's all-stock acquisition offer has now dropped from $158.82 to $143.55 per share. Shares of Comcast gained 1.94 percent, closing at $50.90 while shares of Time Warner gained 2.18 percent, closing at $140.55.
GlaxoSmithKline (NYSE: GSK) will no longer pursue a Phase III testing of its MAGE-A3 lung cancer vaccine as the company was unable to find patients who could benefit from the therapy. Shares lost 0.56 percent, closing at $53.00.
Agrium (NYSE: AGU) issued downside guidance and sees its first quarter earnings coming in above break-even while analysts had estimated the company to report an EPS of $0.53. Shares lost 1.40 percent, closing at $96.15.
Urban Outfitters (NASDAQ: URBN) announced last night that its first quarter comparable store sales growth will be in the low single-digits. Shares gained 3.98 percent, closing at $38.11.
Winners of Note
Last night, an FDA advisory committee voted 13-1 to recommended MannKind's (NASDAQ: MNKD) Afrezza be given marketing approval for treating type 1 diabetes. The committee voted unanimously, 14-0, for treating type 2 diabetes. Shares were halted all day yesterday pending the FDA's guidance. Shares surged by 73.88 percent, closing the day at $6.99 but traded as high as $8.08 in the morning.
Myriad Genetics (NASDAQ: MYGN) announced a raise in 2014 reimbursement from government operated health care programs. The company said that the Centers for Medicare and Medicaid Services will pay $2.767 for its gene-based tests for breast cancer, 37 percent more than the $2,021 CMS was paying for the tests. Shares hit new 52 week highs of $40.33 before closing the day at $39.18, up 11.47 percent.
Europe's fourth largest bus manufacturer, Aberdeen, has delivered the first round of buses powered by Ballard Power (NASDAQ: BLDP) Power's 150 KW FCvelocity-HD6 fuel cell module. Four out of ten buses were delivered across Scotland, with the remaining buses set to be delivered in the coming weeks. Shares gained 8.46 percent, closing at $4.87.
After pricing its IPO in the $15 to $17 range, shares of Rubicon Project (NASDAQ: RUBI) opened for trading for the first time at $17.50 and traded as high as $21.20, before closing the day at $20.04, up 33.60 percent.
Decliners of Note
Liquidity Services (NASDAQ: LQDT) announced that it has been determined the apparent high bidder for a contract with the U.S. Department of Defense's Logistics Agency to purchase, manage and sell non-rolling stock surplus assets. The company's high bid was equal to 4.35 percent of the DoD's original acquisition value (OAV), which was higher than the current rate of 1.8 percent paid on the OAV. Analysts at RW Baird noted that the high bid is “quite a bit” higher than expected and the analysts will re-evaluate its Outperform rating as the full contract details have yet to be finalized and released. Shares lost 6.67 percent, closing at $20.86.
Earnings of Note
This morning, Monsanto Company (NYSE: MON) reported its second quarter results. The company announced an EPS of $3.15, beating the consensus estimate of $3.17. Revenue of $5.84 billion beat the consensus estimate of $5.81 billion. Sales in the agricultural productivity business grew 5.2 percent to $1.18 billion while Total Seeds and Genomics sales rose 6.9 percent to $4.65 billion. Net income rose to $1.67 billion from $1.48 billion in the same quarter last year while gross margin grew to 59.1 percent from 56.1 percent. Monsanto confirmed earlier guidance for full year fiscal 2014 and is projecting an EPS of $5.00 to $5.20, below the consensus estimate of $5.25. The company expects a strong second half to 2014 with a smaller loss in its fourth quarter compared to recent years. Shares gained 0.76 percent, closing at $114.42.
This morning, Jos. A. Bank (NASDAQ: JOSB) reported its fourth quarter results. The company announced an EPS of $1.07, in-line with the consensus estimate of. Revenue of $356 million was in-line with the consensus estimate of $356.14 million. Comparable-brand sales for the quarter rose 1.8 percent from last year (which included an extra week) while direct sales rose 10.6 percent last year. The company's earnings dipped from $28.4 million last year to $27.4 million. The acquisition by Men's Wearhouse is expected to close by the third quarter of this year. Shares gained 0.19 percent, closing at $64.48.
Quote of the Day
"Mine is in the first quarter of 2015, as far as liftoff for the funds rate. You have to keep in mind I tend to be a more optimistic member of the committee. I have a probably, a somewhat stronger forecast and a view about policy that suggests that maybe we should get up a bit faster than what some of the other members have." - James Bullard, comments made today to Reuters Insider Television.
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