Market Wrap For April 3: Markets Winning Streak Fails To Extend To Five Days
U.S. stocks were unable to post its fifth consecutive day of gains as the weekly jobless claims figure gained more than expected.
Investors and traders were likely sitting on the sideline, waiting for Friday's monthly government jobs. Economists are expecting a gain of 197,000 new jobs in March while February's data showed that 175,000 jobs were created.
San Francisco Federal Reserve Bank President John Williams said that the U.S. central bank should begin raising rates in the second half of 2015, but at a gradual pace.
"Given the economic outlook, and given also my view that we need accommodative policy relative to historical norms, we need to have relatively low levels of interest rates for quite some time,” Williams said in an interview with Reuters that was published late Wednesday.
Williams' statement contrasts those of St. Louis Fed President James Bullard who called for a rate hike in the first quarter of 2015.
- The Dow lost 0.00 percent, closing at 16,572.55.
- The S&P 500 lost 0.11 percent, closing at 1,888.77.
- The Nasdaq lost 0.91 percent, closing at 4,237.74.
- Gold lost 0.33 percent, closing at $1,286.50 an ounce.
- Oil gained 0.67 percent, trading at $100.29 a barrel.
- Silver lost 1.17 percent, trading at $19.88 an ounce.
News of Note
March Challenger Job-Cut Report declined to 34,399 from 45,107 in February.
Initial Jobless Claims rose 16,000 to 326,000, above the 320,000 consensus. Continuing claims rose 22,000 to 2.83 million.
U.S. February Trade Balance widened to -$42.3 billion from -$39.3 billion. Imports totalled $232.7 billion while exports totaled $190.4 billion.
U.S. March PMI Services Index rose to 55.3 from 53.3 in February.
The Bloomberg Consumer Comfort Index rose to -30 from last week's -31.5.
March ISM Non-Manufacturing Index read 53.1, below the 53.3 consensus but higher than the previous reading of 51.6.
EIA Natural Gas Inventory declined 74 bcf, less than the 79bcf decline expected.
U.S. March Global Composite PMI rose to 53.5 from 53.1 in February.
March Global Services PMI rose to 53.5 from 52.7 in February.
China unveiled a new round of stimulus packages to stabilizing the country's slowing growth. Part of the stimulus includes a 150 billion yuan ($24.5 billion) in bonds for railway construction. Chinese officials did not comment whether monetary policy will be altered.
Eurozone services PMI fell to 52.2 in March from 52.6 in February.
The ECB leaves its lending and deposit rates unchanged at 0.25 percent and 0 percent, respectively.
Analyst Upgrades and Downgrades of Note
Analysts at Bernstein initiated coverage of Apollo Global Management (NYSE: APO) with an Outperform rating and $39 price target. Shares gained 1.28 percent, closing at $31.74.
Analysts at Deutsche Bank maintained a Buy rating of Buffalo Wild Wings (NASDAQ: BWLD) with a price target raised to $160 from a previous $155. Shares gained 0.58 percent, closing at $146.83.
Analysts at Citigroup downgraded CF Industries (NYSE: CF) to Neutral from Buy with a $267 price target. Shares lost 2.10 percent, closing at $259.87.
Analysts at Barclays initiated coverage of China Mobile (NYSE: CHL) with an Overweight rating and $32 price target. Shares gained 0.70 percent, closing at $46.08.
Analysts at BMO Capital initiated coverage of Chevron (NYSE: CVX) with a Market Perform rating and $125 price target. Shares lost 0.28 percent, closing at $119.01.
Analysts at Sterne Agee downgraded Citigroup (NYSE: C) to Neutral from Buy with a price target lowered to $52 from a previous $60. Shares lost 1.18 percent, closing at $47.67.
Analysts at JPMorgan downgraded Deutsche Bank (NYSE: DB) to Neutral from Overweight. Shares lost 2.17 percent, closing at $45.03.
Analysts at Jefferies initiated coverage of Dollar General (NYSE: DG) with a Hold rating and $56 price target. Shares gained 0.16 percent, closing at $57.31.
Analysts at Cowen upgraded Eli Lilly and Company (NYSE: LLY) to Outperform from Market perform with a price target raised to $68 from a previous $61. Shares lost 0.32 percent, closing at $58.96.
Analysts at Macquarie upgraded Freeport-McMoRan (NYSE: FCX) to Outperform from Neutral with a price target raised to $40 from a previous $36. Shares gained 0.24 percent, closing at $33.40.
Analysts at Nomura maintained a Buy rating on Liberty Global (NASDAQ: LBTYA) with a price target lowered to $60 from a previous $67. Shares gained 0.48 percent, closing at $41.60.
Analysts at Baird downgraded Liquidity Services (NASDAQ: LQDT) to Neutral from Outperform with a price target lowered to $19 from a previous $30. Shares plunged to new 52 week lows of $17.90 before closing the day at $18.36, down 11.98 percent.
Analysts at JPMorgan upgraded Monsanto Company (NYSE: MON) to Overweight from Neutral with a price target raised to $125 from a previous $115. Shares gained 2.24 percent, closing at $116.98.
Analysts at Morgan Stanley initiated coverage of J.M. Smucker (NYSE: SJM) with an Equal-weight rating and $101 price target. Shares gained 0.10 percent, closing at $97.89.
Analysts at BMO Capital initiated coverage of Exxon Mobil (NYSE: XOM) with an Underperform rating and $85 price target. Shares lost 0.05 percent, closing at $97.90.
Equities-Specific News of Note
Google investors received one new-voting C share (under the ticker ‘GOOG') for each existing A share (now under the ticker ‘GOOGL') held as part of planned stock split. Shares of Google Class C (NASDAQ: GOOG) gained 0.41 percent, closing at $569.30 while shares of Google Class A (NASDAQ: GOOGL) gained 0.60 percent, closing at $571.50.
Vodafone (NYSE: VOD) announced that it will spend one billion pounds on networks and services in the U.K as part of its strategy to expand its European operations after it sold its 45 percent stake of Verizon Wireless. Shares of Vodafone lost 1.25 percent, closing at $36.26.
NQ Mobile (NYSE: NQ) announced that its fourth quarter results will be released on April 10 after the market closes. Shares lost 0.98 percent, closign at $17.10.
Walgreen (NYSE: WAG) announced that overall March sales rose 4.5 percent from a year ago to $6.43 billion with comparable stores sales rising 3.5 percent over the previous year.
Rite Aid (NYSE: RAD) announced that overall March sales rose 0.7 percent from a year ago to $1.947 billion with comparable stores sales rising 1.1 percent over the previous year. Shares gained 1.10 percent, closing at $67.08.
Chinese based IT education service provider, Tarena (NASDAQ: TEDU) initially priced its IPO at $9. Shares began trading for the first time at $9.86 and traded as high as $10.80 before closing the day at $9.06, up 0.67 percent.
Zillow (NYSE: Z) announced that it will partner with Chinese based E-House (NYSE: EJ) to create a co-branded website for Chinese based users to view U.S. based properties online. Shares of Zillow lost 1.75 percent, closing at $90.99 while shares of E-House lost 2.98 percent, closing at $12.36.
Pandora's (NYSE: P) listener hours rose 14 percent year over year in March to 1.71 billion, outpacing February's nine percent growth and January's 13 percent growth. Shares lost 5.06 percent, closing at $29.85.
Winners of Note
Anadarko Petroleum (NYSE: APC) confirmed that it has entered into a settlement with Tronox and has agreed to pay $5.15 billion to settle environmental damages left behind when it bought the company in 2005. Anadarko was previously assumed to pay $25 billion to clean up more than 2,700 sites and compensation more than eight thousands Tronox claimants. Shares surged to new 52 week highs of $100.00 before closing the day at $98.96, up 14.44 percent.
Decliners of Note
A Wall Street Journal article stated that the majority of the 2,046 FTC complaints recently filed against Yelp (NASDAQ: YELP) are “from small businesses that claim to have received unfair or fraudulent reviews, often after down a pitch to advertise on the site.” The Wall Street Journal will receive access to 2,037 of the 2,046 FTC complaints due to a Freedom of Information Act request (with individual identifying information removed.) Shares lost 6.64 percent, closing at $70.61.
Liberty Media announced that it will sell the majority of its stake in Barnes & Noble (NYSE: BKS) and will only retain a ten percent stake. Liberty Media bought a 17 percent stake of the company in 2011 will now waive its right to have two representatives on Barnes & Noble's board. Shares of Barnes & Noble lost 13.52 percent, closing at $19.12.
On Wednesday, Liquidity Services (NASDAQ: LQDT) announced that it was the apparent high bidder for a Department of Defense contract. This morning the company announced it withdrew from bidding on the contract after reaching a level that would prove to be “economically unsustainable." Shares plunged to new 52 week lows of $17.90 before closing the day at $18.36, down 11.98 percent.
CannaVEST (NYSE: CANV) disclosed material errors in its 10-Qs that were released in the first, second and third quarter of 2013. The documents contain issues with the company's non-GAAP-complaint accounting for the purchase price and price allocation for the PhytoSPHERE Systems assets. Shares plunged 21.09 percent, closing at $25.30.
Earnings of Note
After the market closed, Global Payments (NYSE: GPN) reported its third quarter results. The company announced an EPS of $0.96, beating the consensus estimate of $0.95. Revenue of $616.5 million missed the consensus estimate of $618.49 million. Shares were trading flat at $71.64 following the company's earnings release.
After the market closed, Micron Technology (NASDAQ: MU) reported its second quarter results. The company announced an EPS of $0.85, beating the consensus estimate of $0.76. Revenue of $4.10 billion beat the consensus estimate of $3.99 billion. Shares were trading higher by 1.21 percent at $24.29 following the company's earnings release.
Quote of the Day
"High-frequency traders are gaming the system, reaping billions in the process and undermining investor confidence in the fairness of the markets. It's a growing cancer and needs to be addressed. If confidence erodes further, the fuel of our free-enterprise system, capital formation, is at risk. We can't allow that to happen. For sure, we still believe investing in equities is a primary path to long-term wealth creation, and we believe in the long-term structural integrity of the markets to deliver that over time for individual investors, which is all the more reason to be vigilant in removing anything that creates unfair advantage or undermines investor confidence."- Schwab CEO Walt Bettinger in a company statement on high frequency trading.
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