Market Wrap For April 8: Markets Bounce Higher As Earnings Season Begins
U.S. stocks rose as major indices finished the day just barely in the green as the Dow was up as much as 50 points and lower by 65 points before settling the day gaining 10 points.
The Nasdaq bounced back sharply from its worst three-day performance since 2011 as investors went bargain hunting for social media and Internet shares such as LinkedIn, Pandora and Qihu.
- The Dow gained 0.06 percent, closing at 16,256.27.
- The S&P 500 gained 0.38 percent, closing at 1,851.96.
- The Nasdaq gained 0.81 percent, closing at 4,112.99.
- Gold gained 0.76 percent, trading at $1,308.20 an ounce.
- Oil gained 2.14 percent, trading at $102.59 a barrel.
- Silver gained 0.44 percent, trading at $20.00 an ounce.
News of Note
NFIB Small Business Optimism Index rose to 93.4 from 91.4.
ICSC Retail Store Sales rose 1.5 percent week over week compared to a 3.6 percent gain last week.
Redbook Chain Store Sales rose 2.9 percent year over year compared to a gain of 2.3 percent last week.
February Job Openings and Labor Turnover Survey showed 4.384 million job openings, ahead of the 4.0 million consensus and a prior reading of 3.974 million.
The Bank of Japan has left its key interest rate at 0.1 percent while maintain its plans to expand the monetary base by 60 trillion yen to 70 trillion yen a year. Regulators will vote today to increase the leverage ratio for the eight largest U.S. banks to a range of five percent to six percent of their total assets. The U.S. senate approved a bill to extend benefits for long-term unemployed people as defined by being out of work for at least six month.
Analyst Upgrades and Downgrades of Note
Analysts at Janney Capital downgraded American Eagle (NYSE: AEO) to Neutral from Buy with a price target lowered to $10 from a previous $17. Shares gained 0.39 percent, closing at $11.73.
Analysts at Deutsche Bank upgraded Allegiant Travel Company (NASDAQ: ALGT) to Buy from Hold with a price target raised to $130 from a previous $110. Shares gained 4.31 percent, closing at $115.04.
Analysts at Wunderlich downgraded Cisco (NASDAQ: CSCO) to Hold from Buy with a price target lowered to $24 from a previous $25. Shares gained 0.39 percent, closing at $22.94.
Analysts at Wedbush upgraded FireEye (NASDAQ: FEYE) to Outperform from Neutral with a price target lowered to $62 from a previous $72. Shares gained 3.97 percent, closing at $52.35.
Analysts at Barclays initiated coverage of JinkoSolar Holdings (NYSE: JKS) with an Overweight rating and $51 price target. Shares gained 6.30 percent, closing at $29.02.
Analysts at BMO Capital upgraded Eli Lilly (NYSE: LLY) to Market Perform from Underperform with a price target raised to $62 from a previous $50. Shares lost 0.05 percent, closing at $58.59.
Analysts at Credit Suisse maintained a Neutral rating on The Nasdaq OMX Group (NASDAQ: NDAQ) with a price target raised to $40 from a previous $35. Shares lost 2.74 percent, closing at $34.81.
Analysts at Stifel Nicolaus upgraded Nike (NYSE: NKE) to Buy from Hold with an $87 price target. Shares gained 2.92 percent, closing at $72.90.
Analysts at Barclays maintained an Overweight rating on Transocean (NYSE: RIG) with a price target lowered to $45 from a previous $54. Shares gained 1.77 percent, closing at $42.05.
Analysts at Mizuho Securities downgraded Sina (NASDAQ: SINA) to Neutral from Buy with a price target lowered to $52.20 from a previous $87. Shares gained 3.19 percent, closing at $55.30.
Analysts at SunTrust Robinson Humphrey upgraded Yelp (NASDAQ: YELP) to Buy from Neutral with a price target lowered to $85 from a previous $100. Shares gained 1.79 percent, closing at $67.18.
Equities-Specific News of Note
According to ChannelAdvisor same-store-sales for Amazon.com (NASDAQ: AMZN) rose to 26.2 percent in March from February's 23.0 percent.
eBay's (NASDAQ: EBAY) same-store-sales rose to 17.8 percent from January's 15.0 percent.
Shares of Amazon gained 2.93 percent, closing at $327.07 while shares of eBay gained 3.49 percent, closing at $54.80.
Amazon.com's market share rose 0.6 percent from last March to 3.0 percent while YouTube's share fell year over year to 16.9 percent from 28.2 percent. Shares of Netflix gained 3.22 percent, closing at $348.89.
Citigroup (NYSE: C) may miss its goal of raising its adjusted return on tangible common equity to ten percent or higher by next year. Shares gained 0.13 percent, closing at $46.61.
Wal-Mart (NYSE: WMT) announced it will open 50 wholesale stores in India over the next four to five years in addition to an e-commerce business in India this summer. Shares gained 1.13 percent, closing at $78.18.
IMAX (NASDAQ: IMAX) sold a ten percent stake of its company to private equity firm FountainVest Partners and a ten percent stake to China Media Capital. Each entity will pay $40 million for their stake. Shares lost 0.72 percent, closing at $27.47.
American Airlines (NYSE: AAL) estimated that its first quarter operating margin would fall between five percent and seven percent, down from a previous guidance of a six percent to eight percent gain. Shares gained 0.56 percent, closing at $35.98.
The FDA approved Teva Pharmaceutical's (NASDAQ: TEVA) generic Omega 3 Acid Ethly Esters Capsules. Shares lost 1.18 percent, closing at $50.90.
Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC) executives will sit on the “hot seat” and face questioning from the Senate Judiciary Committee over a potential merger. Shares of Comcast lost 0.47 percent, closing at $48.85 while shares of Time Warner lost 0.21 percent, closing at $135.95.
Deutsche Bank (NYSE: DB) may be forced to set aside as much as 2.2 billion euro in additional capital under a new proposed European Union rule relating to how banks value certain assets. Shares gained 0.14 percent, closing at $44.42.
Tesla Motors (NASDAQ: TSLA) announced that it created a new subsidiary, Tesla Finance, to handle a new financing product. Tesla's CEO Elon Musk explained on Twitter to explain: @elonmusk Leasing a Model S takes 5 mins online, no signatures & one tap on car center screen to accept when delivered.
Separately, according to AutoData, Tesla sold around 1,600 Model S vehicles in March, a slight increase year over year. Shares gained 3.83 percent, closing at $215.46.
Alkermes (NASDAQ: ALKS) announced that its Aripirazole Lauroxil has achieved the primary endpoint in a Phase III trial. The drug reduced symptoms of schizophrenia in patients at a higher rate than those who received a placebo. The company will file for FDA approval of the drug in the third quarter of this year. Shares gained 2.38 percent, closing at $42.08.
Facebook's (NASDAQ: FB) recently acquired WhatsApp is teaming up with German carrier E-Plus to sell a ten euro prepaid SIM card that provides users with access to its mobile messaging service with no data charges. Shares of Facebook gained 2.18 percent, closing at $58.19. Twitter (NYSE: TWTR) unveiled samples of its Twitter profile on its blog page. Shares lost 1.58 percent, closing at $41.78.
Yum Brands (NYSE: YUM) announced that it will begin “phase two” of its advertising campaign to promote its breakfast menu in addition to new items such as yogurt, oatmeal and a premium coffee offering. Shares gained 1.44 percent, closing at $76.31.
CME Group (NYSE: CME) was forced to temporarily suspend trading in more than two dozen contracts including cattle, wheat and corn due to technical issues. Shares gained 2.28 percent, closing at $69.13.
A Florida jury said that Blackberry's (NASDAQ: BBRY) hardware features do not infringe on three NXP Semiconductors (NASDAQ: NXPI) patents as the company had claimed. Shares of BlackBerry gained 1.27 percent while shares of NXP gained 4.52 percent, closing at $58.24.
Ford (NYSE: F) announced that it had sold 103,815 cars in China in March, an increase of 28 percent year over year. Shares gained 1.00 percent, closing at $16.10.
Winners of Note
According to Bloomberg, Chinese travel sites Ctrip.com International (NASDAQ: CTRP) and Qunar (NASDAQ: QUNR) are in talks over a merger or partnership. A combined entity of both travel sites would create a monster of a Chinese online and mobile travel company. Shares of Ctrip gained 10.41 percent, closing at $55.48 while shares of Qunar gained 14.65 percent, closing at $30.84. Tiger Global Management disclosed it owns a 6.5 percent stake in 58.com (NASDAQ: WUBA). Chase Coleman's fund previously showed a 300,000 share stake. Shares gained 14.75 percent, closing at $43.41.
Plug Power's (NASDAQ: PLUG) CEO Andrew Marsh said that the company is considering expanding fuel cell usage into new ventures such as airport support vehicles. Marsh wants his fuel cell products to compete with electricity from fossil fuels. Shares gained 6.97 percent, closing at $7.21.
Decliners of Note
After more than three years since Rovi (NASDAQ: ROVI) initiated a lawsuit against Amazon.com relating to patent violations, the United States Court of Appeals has rejected ROVI's claims and affirmed a non-infringement ruling. Shares of Rovi lost 11.87 percent, closing at $20.50.
Earnings of Note After the market closed, Alcoa (NYSE: AA) reported its first quarter results. The company announced an EPS of $0.09, beating the consensus estimate of $0.05. Revenue of $5.45 billion missed the consensus estimate of $5.55 billion. Shares were trading higher by 2.55 percent at $12.85 following the earnings release.
Quote of the Day
Since that date [March 2007]—over four years ago!—the unemployment rate has fallen slowly to 6.7 percent. This is still unusually high relative to the past quarter century or so. The current unemployment rate is also high relative to most forecasts of its expected long-run level. Personally, I expect that, over the long run, the unemployment rate will converge to just over 5 percent. Basically, an unemployment rate of 6.7 percent means that the U.S. labor market is far from healthy.” – Minneapolis Fed Chief Narayana Kocherlakota speaking at the Monetary Policy Report to the People of Rochester, Minnesota.
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