Market Overview

Market Wrap For April 17: Mixed Earnings Drag The Dow Lower While S&P 500 & Nasdaq End Positive

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U.S. stocks were mostly higher on Thursday as both the S&P 500 index and Nasdaq index recorded a fourth straight winning session in a relatively slow news day that was heavy on earnings.

The Dow Jones rose as much as 35 points and falling as much as 56 as earnings from Dow listed companies were mixed.

Manufacturing Activity in the Philadelphia region rose in April according to the Philly Fed Business Outlook. Initial Jobless Claims data also contributed to a positive market sentiment.

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  • The Dow lost 0.10 percent, closing at 16,408.54.
  • The S&P 500 gained 0.14 percent, closing at 1,864.85.
  • The Nasdaq gained 0.23 percent, closing at 4,095.52.
  • Gold lost 0.66 percent, trading at $1,294.90 an ounce.
  • Oil gained 0.66 percent, trading at $104.45 a barrel.
  • Silver lost 0.07 percent, trading at $19.62 an ounce.

News of Note

Initial Jobless Claims rose 2,000 to 304,000, below the consensus of 312,000. Continuing claims fell 11,000 to 2.74 million.

April Philly Fed Business Outlook rose to 16.6 from 9.0 in March and topped the consensus of 10.0.

The average rate for a 30-year fixed-rate mortgage fell to 4.27 percent from 4.34 percent a week ago, according to Freddie Mac's weekly survey.

EIA Natural Gas Inventory increased 24 billion cubic feet, compared to a gain of four billion cubic feet last week.

Analyst Upgrades and Downgrades of Note

Analysts at Barclays maintained an Equal-weight rating on American Airlines (NYSE: AAL) with a price target raised to $39 from a previous $38. Shares lost 0.31 percent, closing at $35.40.

Analysts at National Alliance initiated coverage of Actavis (NYSE: ACT) with a Buy rating and $246 price target. Shares lost 1.18 percent, closing at $197.02.

Analysts at Nomura maintained a Buy rating on American Express (NYSE: AXP) with a price target lowered to $102 from a previous $105. Shares lost 1.35 percent, closing at $86.22.

Analysts at Jefferies maintained a Buy rating on Bank of America (NYSE: BAC) with a price target lowered to $18.50 from a previous $20. Shares gained 0.16 percent, closing at $16.16.

Analysts at JMP Securities maintained a Market Outperform rating on Google (NASDAQ: GOOG) with a price target lowered to $695 from a previous $725. Meanwhile, analysts at Deutsche Bank maintained a Buy rating on Google with a price target lowered to $625 from a previous $665. Also maintaining Buy ratings with lowered price targets include analysts at Citigroup, CRT Capital and Cantor Fitzgerald. Shares lost 3.67 percent, closing at $536.10.

Analysts at Stifel Nicolaus maintained a Buy rating on IBM (NYSE: IBM) with a price target lowered to $218 from a previous $220. Shares lost 3.20 percent, closing at $190.12.

Analysts at Jefferies maintained a Buy rating on Icahn Enterprises (NYSE: IEP) with a price target raised to $115 from a previous $66. Shares gained 2.02 percent, closing at $100.28.

Analysts at Citigroup maintained a Buy rating on Imperial Oil (NYSE: IMO) with a price target raised to $60 from a previous $53. Shares gained 0.11 percent, closing at $47.21.

Analysts at Canaccord Genuity initiated coverage of Jazz Pharmaceuticals (NASDAQ: JAZZ) with a Buy rating and $163 price target. Shares gained 0.04 percent, closing at $136.15.

Analysts at Pacific Crest upgraded Netflix (NASDAQ: NFLX) to Outperform from Sector Perform with a $500 price target. Shares gained 4.32 percent, closing at $345.74.

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Analysts at Baird upgraded SolarCity (NASDAQ: SCTY) to Outperform from Neutral with a price target unchanged at $75. Shares gained 1.09 percent, closing at $56.72.

Analysts at Stifel Nicolaus maintained a Buy rating on Sina (NYSE: SINA) with a price target lowered to $80 from a previous $100. Shares surged 6.72 percent, closing at $56.55.

Analysts at Citigroup maintained a Neutral rating on Toll Brothers (NYSE: TOL) with a price target raised to $37 from a previous $34. Shares lost 1.47 percent, closing at $34.15.

Equities-Specific News of Note

According to Bloomberg, Netflix (NASDAQ: NFLX) is in talks with Vodafone (NYSE: VOD) to give its clients “free access to Netflix content for a period of time.” Shares of Netflix gained 4.32 percent, closing at $345.74 while shares of Vodafone gained 0.95 percent, closing at $35.99.

Twitter (NYSE: TWTR) released a blog post titled “A new way to promote mobile apps to 1 billion devices, both on and off-Twitter. Shares gained 1.33 percent, closing at $45.01.

Wal-Mart (NYSE: WMT) owned Sam's Club will begin offering an expanded warranty coverage and 24/7 tech support to boost its electronics sales. Shares gained 0.57 percent, closing at $77.66.

Ford (NYSE: F) announced that it will begin selling five different Lincoln cars in China by 2016. Shares lost 0.44 percent, closing at $16.00.

Total (NYSE: TOT) said that it found oil off the Ivory Coast below 2,300 meters of water and plans to evaluate its find. Shares hit new 52 week highs of $68.37 before closing the day at $68.08, up 0.46 percent.

A top shareholder of Chesapeake Energy, (NYSE: CHK) Southeastern Asset Management, said that the company's CEO Doug Lawler has made “substantial progress” since assuming top ranks of the company less than a year ago. Shares gained 2.47 percent, closing at $28.17.

Yahoo! (NASDAQ: YHOO) named Charles Schwab and former Wal-Mart CEO H. Lee Scott Jr. to its board of directors. Shares gained 0.08 percent, closing at $36.38.

Winners of Note

Weibo (NYSE: WB) priced its IPO at $17 and shares began trading for the first time at $16.27 but quickly rose to to $24.48, before closing the day at $20.24, up 19.06 percent. Shares of Sina (NYSE: SINA), Weibo's parent company gained 6.72 percent, closing at $56.55.

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Thomas Tisch, a director at Sears Holdings (NASDAQ: SHLD) was revealed in an SEC form to have purchased 475,000 shares on April 15 and April 16. Shares surged 14.08 percent, closing at $38.33.

Decliners of Note

This morning, Chipotle Mexican Grill (NYSE: CMG) reported its first quarter results. The company announced an EPS of $2.64, missing the consensus estimate of $2.65. Revenue of $904.2 million beat the consensus estimate of $873.83 million. Net income for the quarter rose to $83.1 million from $76.6 million in the same quarter last year but operating margin fell 40 bps to 25.9 percent despite a rise of 13.4 percent in comparable sales. Chipotle Mexican Grill noted that food costs were higher by 150 bps and sees its comparable sales growth for the year growing in the high single digits. Shares lost 5.94 percent, closing at $519.61.

Barnes & Noble (NYSE: BKS) Chairman Leonoard Riggio revealed to have sold 3.7 million shares of the company at a price of $17.30. Shares plunged 11.99 percent, closing at $16.37.

Wal-Mart (NYSE: WMT) revealed a new Money Transfer Service called, Walmart-2-Walmart which will allow customers to transfer money to and from more than 4,000 Walmart stores nationwide for a cost that the company estimates is 50 percent less than competitors (Customers can transfer up to $900 for $9.50) such as Moneygram International (NASDAQ: MGI) whose shares plummeted to new 52 week lows of $14.19 before closing the day at $14.81, down 17.68 percent.

Shares of The Western Union Company (NYSE: WU) were also under pressure following Wal-Mart's announcement. Shares fell 4.98 percent, closing at $15.25.

Earnings of Note

This morning, Schlumberger (NYSE: SLB) reported its first quarter results. The company announced an EPS of $1.21, in-line with the consensus estimate. Revenue of $11.24 billion missed the consensus estimate of $11.49 billion. Net income for the quarter rose to $1.59 billion from $1.26 billion in the same quarter last year as revenue saw a 19 percent jump in the Middle East and Asia region and a 12 percent boost in North America. Schlumberger expects to see a rise of more than six percent this year in spending among clients. Shares lost 1.02 percent, closing at $99.91.

This morning, BB&T (NYSE: BBT) reported its first quarter results. The company announced an EPS of $0.69, missing the consensus estimate of $0.70. Revenue of $2.29 billion missed the consensus estimate of $2.31 billion. Net income for the quarter rose to $501 million from $210 million in the same quarter as non-interest expense of $1.4 billion fell 0.8 percent from last year, driven by $35 million lower personnel expense costs and professional services expenses. BB&T's Common Equity Tier 1 capital ratio rose to 9.5 percent from 9.3 percent at the end of 2013. Shares lost 3.58 percent, closing at $37.93.

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This morning, DuPont (NYSE: DD) reported its first quarter results. The company announced an EPS of $1.58, missing the consensus estimate of $1.59. Revenue of $10.1 billion missed the consensus estimate of $10.45 billion. Net income fell to $1.45 billion from $3.36 billion in the same quarter last year (where the company sold its coating business.) The company estimated that cold winter conditions reduced the quarterly earnings per share by $0.07 due to increased operating costs and lower sales. Sales in the company's agricultural business fell six percent but the industrial segments and margins saw improved activity. DuPont reaffirmed previous full year fiscal 2014 guidance and expects to earn an EPS of $4.20 to $4.45, versus a consensus estimate of $4.32. Shares lost 1.09 percent, closing at $66.98.

This morning, UnitedHealth Group (NYSE: UNH) reported its first quarter results. The company announced an EPS of $1.10, beating the consensus estimate of $1.09. Revenue of $31.7 billion missed the consensus estimate of $32.03 billion. Operating earnings of $2.1 billion were flat year over year but operating margin fell to 3.5 percent from 4.1 percent last year despite a negative impact from the Affordable Care Act. The company guided its full fiscal year revenue guidance to be $128 billion to $129 billion, below the consensus estimate of $129.59 billion. Net EPS is expected to fall in a range of $5.40 to $5.60 versus a consensus estimate of $5.59. Shares lost 3.08 percent, closing at $75.78.

This morning, General Electric (NYSE: GE) reported its first quarter results. The company announced an EPS of $0.33, beating the consensus estimate of $0.32. Revenue of $34.2 billion missed the consensus estimate of $34.45 billion. Operating earnings of $3.33 billion fell from $4.07 billion in the same quarter last year. General Electric saw increases in every segment from a year ago with industrial sales increasing eight percent to $24 billion with the segment's profit rising 12 percent to $3.3 billion. Infrastructure orders of $23.7 billion were flat year over. During the quarter the company filed a registration statement with the SEC for the IPO of its retail finance business. The company announced that it is on track to see $1 billion or more in structural cost-out for the year. Shares gained 1.68 percent, closing at $26.56.

This morning, Morgan Stanley (NYSE: MS) reported its first quarter results. The company announced an EPS of $0.68, beating the consensus estimate of $0.59. Revenue of $8.8 billion beat the consensus estimate of $8.52 billion. Income from continuing operations for the quarter rose to $1.5 billion from $981 million in the same quarter last year based on strong gains in Wealth Management and FICC. Morgan Stanley's Common Equity Tier 1 capital ratio was approximately 15.6 percent and its book value was $32.38. Shares gained 2.91 percent, closing at $30.76.

This morning, PepsiCo (NYSE: PEP) reported its first quarter results. The company announced an EPS of $0.83, beating the consensus estimate of $0.75. Revenue of $12.62 billion beat the consensus estimate of $12.43 billion. Net income for the quarter rose to $1.23 billion from $1.09 billion from the same quarter last year as the company delivered a minimum of four percent growth in organic revenue in every business unit, including a nine percent growth in developing and emerging markets. Pepsi noted that it expects foreign exchange transactions to have an unfavorable impact of around four percentage points on full year core EPS growth in the year. Shares gained 0.92 percent, closing at $85.55.

This morning, Goldman Sachs (NYSE: GS) reported its first quarter results. The company announced an EPS of $4.02, beating the consensus estimate of $3.43. Revenue of $9.33 billion beat the consensus estimate of $8.7 billion. Net earnings for the quarter declined to $2.03 billion from $2.26 billion in the same quarter last year as institutional client services revenue dropped 13 percent to $4.45 billion and FICC revenue dropped 11 percent to $2.85 billion and investing and lending revenue fell 26 percent to $1.53 billion. Goldman Sachs' Common Equity Tier 1 ratio was 14.6 percent and the bank's book value totaled $154.69. Shares gained 0.14 percent, closing at $157.44.

After the market closed, Advanced Micro Devices (NYSE: AMD) reported its first quarter results. The company announced an EPS of $0.00, beating the consensus estimate of -$0.02. Revenue of $1.4 billion beat the consensus estimate of $1.34 billion. Shares were trading higher by 4.07 percent at $3.84 following the earnings release.

Quote of the Day

"Earnings last night were pathetic and sad, and today they are not so bad. I'm happy to see GE have good earnings today. It's hard to think of a business they are not involved in. They are just a great synthetic play to everything in the world. The other thing that was a surprise was that Morgan Stanley actually reported good earnings on fixed income." - JJ Kinahan, Chief Strategist at TD Ameritrade speaking with CNBC.

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