Market Overview

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U.S. stocks rose as the S&P 500 toppled to a new all-time high of 1,994.76 while the Dow rose above the 17,000 mark following positive economic reports.

Speaking from Jackson Hole, San Francisco's Federal Reserve President John Williams stated that raising the benchmark interest rate next summer is a “reasonable guess.” Naturally, the timing when rates rise will depend on how the economy is doing, Williams also said.

The Fed's Head Janet Yellen will speak tomorrow at Jackson Hole, with dovish comments expected to be heard.

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  • The Dow gained 0.36 percent, closing at 17,039.49.
  • The S&P 500 gained 0.29 percent, closing at 1,992.37.
  • The NASDAQ gained 0.12 percent, closing at 4,532.10.
  • Gold lost 1.30 percent, trading at $1,278.30 an ounce.
  • Oil gained 0.65 percent, trading at $94.06 a barrel.
  • Silver lost 0.39 percent, trading at $19.42 an ounce.

News Of Note

Initial Jobless Claims declined 14,000 to 298,000, below the consensus of 312,000. Continuing claims fell 49,000 to 2.5 million.

August U.S. PMI Manufacturing rose to 58 (versus expectations of 55.7) from 55.8 in July.

August Philly Fed Business Outlook rose to +28.0 (versus expectations of +19.2) from +23.9 in July.

July Leading Index rose 0.9 percent to 103.3 (versus expectations of +0.6 percent).

July Coincident Index rose 0.2 percent after previously rising 0.3 percent.

July Lagging Index rose 0.2 percent after previously rising 0.5 percent.

July Existing Home Sales rose to 5.15 million (versus expectations of 5.03 million) from 5.03 million in June.

EIA Natural Gas Inventory rose 88 bcf, ahead of estimates for a 83 bcf rise.

Analyst Upgrades And Downgrades Of Note

Analysts at Barclays maintained an Equal-Weight rating on CBS Corporation (NYSE: CBS) with a price target lowered to $65 from a previous $68. Shares lost 0.12 percent, closing at $60.36.

Analysts at UBS maintained a Buy rating on Footlocker (NYSE: FL) with a price target raised to $58 from a previous $54. Shares hit new 52-week highs of $52.94 before closing the day at $52.57, up 0.27 percent.

Analysts at FBN Securities upgraded Hewlett-Packard (NYSE: HPQ) to Outperform from Sector Perform with a price target raised to $45 from a previous $35. Also, analysts at Barclays maintained an Overweight rating on H-P with a price target raised to $41 from a previous $38. As well,, analysts at UBS maintained a Neutral rating on H-P with a price target raised to $37.25 from a previous $34. Shares hit new 52-week highs of $37.39 before closing the day at $37.00, up 5.35 percent.

Analysts at Gilfrod Securities upgraded Kohl's (NYSE: KSS) to Buy from Neutral. Shares hit new 52-week highs of $59.59 before closing the day at $59.29, up 0.70 percent.

Analysts at UBS maintained a Buy rating on L Brands (NYSE: LB) with a price target raised to $69 from a previous $65. Shares gained 1.17 percent, closing at $63.72.

Analysts at UBS maintained a Buy rating on Lowe's Companies (NYSE: LOW) with a price target raised to $58 from a previous $56. Also, analysts at Deutsche Bank maintained a Buy rating on Lowe's with a price target raised to $58 from a previous $54. Taking a different stance, analysts at Jefferies maintained a Hold rating on Lowe's with a price target raised to $51 from a previous $47. Shares hit new 52-week highs of $53.04 before closing the day at $52.67, up 0.65 percent.

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Analysts at UBS maintained a Neutral rating on PetSmart (NASDAQ: PETM) with a price target raised to $71 from a previous $62. Also, analysts at Barclays maintained an Overweight rating on PetSmart with a price target raised to $75 from a previous $63. Shares lost 1.21 percent, closing at $69.67.

Analysts at Bank of America downgraded The Cheesecake Factory (NASDAQ: CAKE) to Underperform from Buy. Shares gained 0.29 percent, closing at $44.60.

Analysts at Jefferies maintained a Buy rating on The Finish Line (NASDAQ: FINL) with a price target raised to $34 from a previous $33. Shares gained 1.03 percent, closing at $29.43.

Analysts at Stifel Nicolaus downgraded The Madison Square Garden Company (NYSE: MSG) to Hold from Buy with a price target raised to $65 from a previous $60. Also, analysts at Macqurie maintained a Neutral rating on Madison Square with a price target raised to $64 from a previous $61. Shares lost 2.11 percent, closing at $63.63.

Analysts at Barclays maintained an Underweight rating on Viacom (NASDAQ: VIAB) with a price target lowered to $83 from a previous $84. Shares lost 0.59 percent, closing at $80.75.

Analysts at Bank of America upgraded Walgreen (NYSE: WAG) to Neutral from Underperform with a price target raised to $66 from a previous $30. Shares lost 1.50 percent, closing at $61.07.

Analysts at Macquaire maintained an Outperform rating on Youku Tudou (NASDAQ: YOKU) with a price target lowered to $28 from a previous $30. Shares lost 0.77 percent, closing at $19.67.

Equities-Specific News Of Note

According to Bloomberg, Dollar General (NYSE: DG) stated that Family Dollar's (NYSE: FDO) CEO Howard Levine ignored multiple requests to consider a merger as the executive feared he would be forced to step down as CEO. Separately, Family Dollar's Board released a statement reaffirming its recommendation in support of a merger agreement with Dollar Tree (NASDAQ: DLTR) rather than pursue a merger with Dollar General due to antitrust issues. Finally, Dollar General responded and reaffirmed its commitment to pursue an acquisition of Family Dollar and that a merger would pass antitrust challenges. Shares of Dollar General lost 0.24 percent, closing at $63.61 while shares of Family Dollar lost 0.50 percent, closing at $79.41. Shares of Dollar Tree lost 1.31 percent, closing at $54.28.

According to The Information, eBay (NASDAQ: EBAY) has been informing nominees it has been interviewing for PayPal's CEO that eBay is considering spinning of the business as soon as next year. EBay responded and said that the company's board of directors will continue exploring all alternatives that create long-term value. Shares gained 4.66 percent, closing at $55.89.

Facebook (NASDAQ: FB) launched a new analytic tool for Instagram ads that tracks ad impressions and monitors user engagement. Facebook also launched an analytic tool for its App Links platform which gives developers the opportunity to track clicks and return visits. Shares lost 0.32 percent, closing at $74.57.

The FDA cleared Intuitive Surgical's (NASDAQ: ISRG) Firefly Fluorescence Imaging feature to be a standard feature on the da Vinci Si System. Shares gained 0.94 percent, closing at $471.89.

TNT (NYSE: TWX) signed a deal with Lions Gate (NYSE: LGF) to receive the rights to Hunger Games and Divergent franchises. TNT will have a network premiere wonder for the franchises in winter 2015. Shares of TNT lost 0.34 percent, closing at $76.76 while shares of Lions Gate gained 0.03 percent, closing at $32.64.

Bank of America (NYSE: BAC) confirmed it reached a $16.65 billion comprehensive mortgage related settlement. The company expects the deal to reduce its third quarter pretax earnings by $5.3 billion and earnings per share after taxes by about $0.43. Shares gained 4.12 percent, closing at $16.16.

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According to Reuters, Pfizer (NYSE: PFE) may reconsider a bid to acquire AstraZeneca (NYSE: AZN) by late 2014. According to British takeover laws, Pfizer could re-initiate contact with AstraZeneca no sooner than November 26. Shares of Pfizer lost 0.24 percent, closing at $28.82 while shares of AstraZeneca gained 3.08 percent, closing at $73.19.

According to Chinese media sources, JinkoSolar Holding (NYSE: JKS) is considering a spinoff of its solar business. Shares gained 1.33 percent, closing at $28.84.

Winners Of Note

This morning, The Children's Place Retail Stores (NYSE: PLCE) reported its second quarter results. The company announced an EPS of -$0.37, beating the consensus estimate of -$0.44. Revenue of $384.60 million beat the consensus estimate of $379.01 million. Net loss for the quarter improved to a loss of $10.67 million from a net loss of $23.64 million in the same quarter a year ago as comparable-store sales rose 0.8 percent in the quarter, reflecting a rebound in shopping activity with more normalized weather patterns. The company's gross profit rate fell 200 basis points to 31.0 percent. During the quarter the company added seven stores bring its total count to 1,113 and announced a partnership with Arvind Lifestyle Brands to expand its presence in India with the potential of opening 50 stores. Children's Place issued guidance and expects its full year fiscal 2014 EPS being $2.95 to $3.05. Shares gained 7.79 percent, closing at $54.38.

Decliners Of Note

This morning, Sears Holdings (NASDAQ: SHLD) reported its fourth quarter results. The company announced an EPS of -$5.39, missing the consensus estimate of -$2.63. Revenue of $8.01 billion missed the consensus estimate of $8.13 billion. Net loss for the quarter fell to $573 million from a net loss of $194 million in the same quarter a year ago as total sales fell 9.8 percent from a year ago. Sears Full-line stores saw a comparable store sales growth of 0.1 percent while Kmart comparable store sales were down 1.7 percent while online and multi-channel sales rose 18 percent in the quarter. The company's gross margin fell 390 basis points to 21.7 percent while SG&A expense ratio rose 60 basis points to 26.4 percent. The company noted that it continues to explore options for its 51 percent interest in Sears Canada including a potential sale of its interest or Sears Canada as a whole. Shares lost 7.15 percent, closing at $33.38.

This morning, Stage Stores (NYSE: SSI) reported its second quarter results. The company announced an EPS of $0.36, missing the consensus estimate of $0.53. Revenue of $377.0 million missed the consensus estimate of $397.57 million. Net income for the quarter rose to $11.19 million from $9.61 million in the same quarter a year ago as comparable-store sales fell 4.2 percent in what the company called a “challenging” quarter. The company's gross profit rate rose 20 percent to 29.8 percent while its SG&A expense ratio fell 30 basis points to 24.7 percent. Stage Stores issued guidance and sees its full year revenue being $1.61 billion to $1.62 billion, below the consensus estimate of $1.65 billion. The company guided its EPS to be in a range of $1.05 to $1.15, below the consensus estimate of $1.22. Shares hit new 52-week lows of $16.86 before closing the day at $17.03, down 7.95 percent.

Galena Biopharma's (NASDAQ: GALE) Board of Directors fired its CEO Mark Ahn on Monday following an internal investigation into allegations of the company engaging in stock promotions. The company appointed Mark Schwartz, Ph.D. as its new President and CEO. Shares lost 5.17 percent, closing at $2.20.

Earnings Of Note

This morning, Hormel Foods (NYSE: HRL) reported its third quarter results. The company announced an EPS of $0.51, beating the consensus estimate of $0.48. Revenue of $2.28 billion beat the consensus estimate of $2.23 billion. Net earnings for the quarter rose to $139.01 million from $113.91 million in the same quarter a year ago as the company benefited from strong demand in pork and turkey and higher sales of value added products offset higher input costs and other challenges in Grocery Products and Specialty Foods. The company noted that its Grocery Products operating profit fell 36 percent from a year ago to $33.781 million; Refrigerated Foods profit rose 101.1 percent to $90.025 million; Jennie-O Turkey Store profits rose 41.9 percent to $64.76 million; Specialty Foods profit declined 25.0 percent to $17.38 million and International & Other profits rose 12.0 percent to $18.70 million. The company reaffirmed its fiscal 2014 guidance and sees its EPS being in a range of $2.17 to $2.27. Shares hit new 52-week highs of $50.73 before closing the day at $49.92, up 4.30 percent.

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This morning, The Buckle (NYSE: BKE) reported its second quarter results. The company announced an EPS of $0.51, missing the consensus estimate of $0.53. Revenue of $235.70 million beat the consensus estimate of $235.45 million. Net income for the quarter fell to $24.47 million from $25.14 million in the same quarter a year ago as comparable store sales fell 0.5 percent. Online sales (which are not included in comparable store sales) rose 1.7 percent to $17.1 million. Shares gained 3.61 percent, closing at $48.78.

This morning, Dollar Tree (NASDAQ: DLTR) reported its second quarter results. The company announced an EPS of $0.61, missing the consensus estimate of $0.64. Revenue of $2.03 billion beat the consensus estimate of $2.01 billion. Net income for the quarter fell to $121.5 million from $124.7 million in the same quarter a year ago which includes a $7.5 million in acquisition-related costs related to the proposed merger with Family Dollar. Excluding the acquisition-related costs, net income would have risen by $1.4 million to $126.1 million. Dollar Tree's gross profit rate fell 80 basis points to 34.2 percent while its SG&A expense ratio was flat at 24.1 percent. The company opened 90 stores, expanded or relocated 20 stores and closed four, bringing its total store count to 5,166. Dollar Tree issued guidance and expects its full year fiscal 2014 revenue being in a range of $8.44 billion to $8.55 billion. Shares lost 1.31 percent, closing at $54.28.

After the market closed, The Gap (NYSE: GPS) reported its second quarter results. The company announced an EPS of $0.70, beating the consensus estimate of $0.69. Revenue of $3.98 billion beat the consensus estimate of $3.97 billion. Shares were trading higher by 0.56 percent at $43.42 following the earnings release.

After the market closed, Ross Stores (NASDAQ: ROST) reported its second quarter results. The company announced an EPS of $1.14, beating the consensus estimate of $1.08. Revenue of $2.73 billion beat the consensus estimate of $2.71 billion. Shares were trading higher by 3.61 percent at $71.75 following the earnings release.

After the market closed, GameStop (NYSE: GME) reported its second quarter results. The company announced an EPS of $0.22, beating the consensus estimate of $0.18. Revenue of $1.73 billion beat the consensus estimate of $1.63 billion. Share were trading higher by 6.84 percent at $43.26 following the earnings report.

After the market closed, Aeropostale (NYSE: ARO) reported its second quarter results. The company announced an EPS of-$0.46, beating the consensus estimate of -$0.58. Revenue of $396.20 million beat the consensus estimate of $395.44 million. Shares were trading lower by 6.65 percent at $3.65 following the earnings report.

After the market closed, Salesforce.com (NYSE: CRM) reported its second quarter results. The company announced an EPS of $0.13, beating the consensus estimate of $0.12. Revenue of $1.32 billion beat the consensus estimate of $1.29 billion. Shares were trading lower by 0.72 percent at $55.31 following the earnings report.

Quote Of The Day

"$JRJC a product of sloppy reporters saying this is China's first online trading. Read before you invest people. Complete nonsense" - Citron Research tweeted following China Finance Online (NASDAQ: JRJC) surged to new 52-week highs of $11.88 this afternoon after the company announced its first independent web-based securities trading platform called "Zhengquantong."

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