Market Wrap For April 4: Dow Suffers Triple Digit Point Loss, Nasdaq Continues To Underperform
U.S. stocks ended the week on a sour note as investors continue to sell many momentum names.
Not helping the bull case was the much anticipated Jobs report number which failed to "wow" the market, coming in relatively in-line with expectations.
The Dow suffered a triple digit point loss and the Nasdaq index continues to experience steeper losses compared to the other major indices. The Nasdaq index is now down more than five percent from its 14-year high of 4,371 recorded not even a month ago, on March 6.
- The Dow lost 0.96 percent, closing at 16,412.71.
- The S&P 500 lost 1.25 percent, closing at 1,865.10.
- The Nasdaq lost 2.60 percent, closing at 4,127.73.
- Gold gained 1.42 percent, trading at $1,302.70 an ounce.
- Oil gained 0.86 percent, trading at $101.15 a barrel.
- Silver gained 0.73 percent, trading at $19.95 an ounce.
News of Note
March Nonfarm Payrolls rose 192,000, below the consensus of 200,000 and below the previous reading which was revised to 197,000. The unemployment rate remained unchanged at 6.7 percent as economists were expecting the rate to drop to 6.6 percent.
Canada reported that it added 42,900 jobs in March, nearly double the 22,000 new job creations economists were expecting. Unemployment declined to 6.9 percent from 7.0 percent.
Analyst Upgrades and Downgrades of Note
Analysts at Macquarie upgraded ANN (NYSE: ANN) to Outperform from Neutral. Shares gained 0.45 percent, closing at $42.04.
Analysts at JPMorgan upgraded Anadarko Petroleum (NYSE: APC) to Overweight from Underweight with a price target raised to $129 from a previous $84. Analysts at Citigroup maintained a Hold rating on Anadarko with a price target raised to $112 from a previous $97. Shares hit new 52 week highs of $103.50 before closing the day at $101.03, up 2.03 percent.
Analysts at Keefe Bruyette & Woods downgraded Franklin Resources (NYSE: BEN) to Market Perform from Outperform with a price target lowered to $61 from a previous $63. Shares lost 2.11 percent, closing at $53.44.
Analysts at Northland Securities initiated coverage of Cisco Systems (NASDAQ: CSCO) with an Outperform rating and $28 price target. Shares lost 1.64 percent, closing at $22.71.
Analysts at Citigroup maintained a Hold rating on EQT (NYSE: EQT) with a price target raised to $114 from a previous $100. Shares gained 0.04 percent, closing at $103.19.
Analysts at Citigroup initiated coverage of FireEye (NASDAQ: FEYE) with a Neutral rating and $60 price target. Shares lost 8.20 percent, closing at $50.36.
Analysts at Citigroup maintained a Buy rating on First Solar (NASDAQ: FSLR) with a price target raised to $87 from a previous $63. Shares gained 1.84 percent, closing at $69.72.
Analysts at Argus Research downgraded General Mills (NYSE: GIS) to Hold from Buy. Shares lost 1.84 percent, closing at $51.27.
Analysts at Bank of America upgraded GameStop (NYSE: GME) to Buy from Neutral with a price target raised to $56 from a previous $43. Shares lost 3.45 percent, closing at $42.86.
Analysts at Barclays maintained an Overweight rating on IntercontinentalExchange Group (NYSE: ICE) with a price target lowered to $234 from a previous $239. Shares lost 2.78 percent, closing at $196.55.
Analysts at Northland Securities initiated coverage of Juniper Networks (NASDAQ: JNPR) with a Market Perform rating and $26 price target. Shares lost 3.34 percent, closing at $25.91.
Analysts at Macquarie upgraded JPMorgan Chase (NYSE: JPM) to Outperform from Neutral. Shares lost 1.40 percent, closing at $59.81.
Analysts at Citigroup downgraded Linn Energy (NYSE: LINE) to Neutral from Buy with a price target lowered to $32 from a previous $41.50. Shares lost 0.32 percent, closing at $28.45.
Analysts at Citigroup downgraded LinnCo (NASDAQ: LNCO) to Neutral from Buy with a price target lowered to $31.50 from a previous $41. Shares lost 0.80 percent, closing at $27.43.
Analysts at JPMorgan maintained an Overweight rating on Las Vegas Sands (NYSE: LVS) with a price target raised to $91 from a previous $89. Shares lost 3.89 percent, closing at $78.31.
Analysts at Credit Suisse maintained an Outperform rating on Micron Technology (NASDAQ: MU) with a $30 price. Shares lost 5.92 percent, closing at $22.58.
Analysts at JPMorgan maintained an Overweight rating on Melco Crown Entertainment (NASDAQ: MPEL) with a price target raised to $51 from a previous $50. Shares lost 1.82 percent, closing at $37.15.
Analysts at JPMorgan maintained a Neutral rating on Teva Pharmaceuticals (NASDAQ: TEVA) with a price target raised to $55 from a previous $49. Shares lost 1.98 percent, closing at $52.97.
Analysts at Citigroup maintained a Buy rating on Williams-Sonoma (NYSE: WSM) with a price target raised to $76 from a previous $67. Shares lost 0.96 percent, closing at $65.72.
Analysts at JPMorgan maintained an Overweight rating on Wynn Resort (NASDAQ: WYNN) with a price target raised to $246 from a previous $232. Shares lost 3.90 percent, closing at $213.64.
Equities-Specific News of Note
Google's (NASDAQ: GOOG) recently acquired Nest Lab hit a bump in the road as a feature that enables a user to turn off a device could easily be activated accidentally. An upgrade could take up to three months to fix the error. Shares lost 4.67 percent, closing at $543.14.
According to The Financial Times, Mylan (NYSE: MYL) is considering a stock offer to acquire Swedish based Meda who has a market cap of $4.5 billion. Meda's board convened and issued a statement in which it rejected Mylan's offer and that “all continued discussions between Meda and Mylan have been terminated without further actions.” Separately, Mylan has sued Celgene over allegations that Celgene has conducted illegal actions to keep its generic version of its Revlimid and Thalomid drugs off the market. Shares of Mylan gained 1.54 percent, closing at $50.63.
Stratasys (NASDAQ: SSYS) announced that it will acquire Interfacial Solutions, a provider of thermoplastics research and development and production services for an undisclosed amount. Shares lost 2.63 percent, closing at $109.37.
One of Petrobras' (NYSE: PBR) contractor dropped a 2.3 km steel pipe into the Atlantic Ocean which will result in the loss of tens of millions of dollars in oil output sales and many millions more in fixing the error. Shares gained 1.29 percent, closing at $13.31.
Dan Loeb's Third Point released a new letter to shareholders of Sotheby's (NYSE: BID) in which Loeb argued that the stock's decline is due to the “failed leadership by the board of directors” and that the board has too little “skin in the game.” Shares lost 2.12 percent, closing at $42.89.
Winners of Note
After the closing bell on Thursday, SYNNEX (NYSE: SNX) reported its first quarter results. The company announced an EPS of $1.25, beating the consensus estimate of $0.94 million. Revenue of $3.02 billion beat the consensus estimate of $ 2.77 million. Net income for the quarter rose to $38.46 million from $33.391 million in the same quarter last year while operating margin slipped 22 bps year over year to 2.05 percent. Synnex issued guidance and expects its second quarter revenue to be $3.1 billion to $3.2 billion, above the consensus estimate of $3.01 billion. The company is also guided its EPS to be $1.34 to $1.38, above the consensus estimate of $1.14. Shares hit new 52 week highs of $79.44 before closing the day at $76.94, up 23.26 percent.
After pricing its IPO at $19, shares of Opower (NYSE: OPWR) began trading for the first time at $25, traded as high as $26.00 before closing the day at $23.08, up 21.47 percent.
After pricing its IPO at $26, shares of GrubHub (NYSE: GRUB) began trading for the first time at $40 and closed the day at $34.00, up 30.77 percent.
After pricing its IPO at $20, shares of IMS Health (NYSE: IMS) began trading for the first time at $22.18, traded as high as $23.69 before closing the day at $23.00, up 15.00 percent.
After pricing its IPO at $7, shares of Five9 (NASDAQ: FIVN) began trading for the first time at $7.95, traded as high as $9.35 before closing the day at $7.64, up 9.14 percent.
Decliners of Note
Online brokers are seeing declines almost across the board as the market continues to focus on their practice of getting paid for order flow (PFOF). U.S. Attorney General Eric Holder confirmed that the U.S. Department of Justice is investigating insider trading and high frequency trading. According to Goldman Sachs analyst Alexander Blostein, E*Trade Financial (NASDAQ: ETFC) earns $92 million or $0.17 in EPS from PFOF while Charles Schwab (NASDAQ: SCHW) earns less than $100 million or $0.08 EPS from its PFOF. TD Ameritrade (NYSE: AMTD) earns $227 million or $0.23 from PFOF. Shares of E*Trade lost 7.83 percent, closing at $20.43, Schwab lost 4.79 percent, closing at $26.06 and TD Ameritrade lost 4.22 percent, closing at $30.67.
Intercept Pharmaceuticals (NASDAQ: ICPT) priced its one million common share offering at $320 per share, below Thursday's closing price of $321.81. Additionally, in a 13G filing, Steven Cohen's hedge fund SAC Capital disclosed on Thursday night that it holds 6,123 shares in the company, down from its 1,369,046 shares the fund held at the end of the last quarter. Shares plunged 9.61 percent, closing at $290.89.
According to Green Car Reports, The State of California's incentive to provide $2,500 rebates to residents who purchase an all-electric vehicle has run out of money. Investors are perceiving this to be a negative for California based Tesla Motors (NASDAQ: TSLA) that counts California as a key market. Shares lost 5.85 percent, closing at $212.23.
Halozyme Therapeutics (NASDAQ: HALO) halted patient enrollment and dosing in its Phase 2 clinical trial of PEGPH20 based on a recommendation by the Data Monitoring Committee who argued that there may be a difference in the thomboembolic rate between the PEGPH20 patients and the non-treated group. Shares lost 27.26 percent, closing at $8.43.
According to T.H. Capital (reported on Thursday) Youku's (NASDAQ: YOKU) average daily video views for its TV dramas are likely to have fallen from 56 million in the previous quarter to 25 million in the first quarter. Shares lost 6.11 percent, closing at $25.81.
Ciena Corp (NASDAQ: CIEN) guided its operating margin to come in at the lower end of its seven percent to ten percent target forecast during its investor day event. The company also guided its fiscal 2014 operating expenditure to be $820 million, slightly above its fiscal 2013 level of $810 million. Revenue is guided to be in the mid-to high single digit market growth, below the current consensus of a 10.4 percent growth. Shares lost 7.09 percent, closing at $21.63.
Earnings of Note
This morning, CarMax Group (NYSE: KMX) reported its fourth quarter results. The company announced an EPS of $0.44, missing the consensus estimate of $0.53. Revenue of $3.08 billion missed the consensus estimate of $3.18 billion. Net earnings for the quarter declined to $99.2 million from $107.2 million in the same quarter last year as the company “corrected our accounting related to cancellation reserves for extended service plan (ESP) and guaranteed asset protection (GAP) products” which had an adverse effect on income. Used vehicle gross profit per unit was little changed in the quarter at $2,141 as same-store sales rose seven percent. The company increases its share repurchase authorization by $1 billion which expires on December 31, 2015. Share slost 4.21 percent, closing at $45.56.
Quote of the Day
Oh, I just want what we all want: a comfortable couch, a nice beverage, a weekend of no distractions and a book that will stop time, lift me out of my quotidian existence and alter my thinking forever.” – American author Elizabeth Gilbert, best known for her 2006 memoir: Eat, Pray, Love.
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