Market Overview

Market Wrap For April 23: S&P 500 Ends Winning Streak, Apple Announces 7-for-1 Stock Split

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U.S. stocks fell after the S&P 500 and Nasdaq has risen for six consecutive trading sessions after new home sales data came in worse than expected.

Investors could reasonably expect the markets to cool off after six straight days of gains especially as earnings continue to come in mixed.

Investors could have also shown some concern with economic data out of China as the world's second largest economy's rose less than economists had expected.

  • The Dow lost 0.08 percent, closing at 16,501.65.
  • The S&P 500 lost 0.22 percent, closing at 1,875.39.
  • The Nasdaq lost 0.83 percent, closing at 4,126.97.
  • Gold gained 0.30 percent, trading at $1,285.00 an ounce.
  • Oil lost 0.24 percent, trading at $101.51 a barrel.
  • Silver gained 0.36 percent, trading at $19.43 an ounce.

News of Note

MBA Mortgage Composite Index declined 3.3 percent, compared to a gain of 4.3 percent last week.

MBA Mortgage Purchase Index declined 3.0 percent, compared to a gain of 1.0 percent last week.

MBA Mortgage Refinance Index declined 4.0 percent, compared to a gain of 7.0 percent last week.

US March PMI Manufacturing Flash Index fell to 55.4 from 55.5 in February.

Related: Home Sales Data Hits Homebuilder ETFs

March New Home Sales fell to 384,000 from 449,000 in February and missed expectations of 455,000.

EIA Petroleum Inventories showed that Crude gained 3.5 million barrels, above estimates for a 2.4 million gain. Gasoline declined 0.3 million barrels, less the 1.4 million decline expected. Distillates rose 0.6 million barrels.

China's flash manufacturing PMI rose to 48.3 in April from 48 in March but missed the consensus of 48.4.

Eurozone flash manufacturing PMI increased to 53.3 in April from 53 in March and topped the consensus of 53.

For the seventh time in eight weeks, Russia canceled its planned sale of up to $560 million of nine-year and five-year notes.

Analyst Upgrades and Downgrades of Note

Analysts at Macquarie upgraded AK Steel (NYSE: AKS) to Outperform from Neutral with a price target raised to $11 from a previous $6. Shares gained 7.21 percent, closing at $7.06.

Analysts at JPMorgan maintained a Neutral rating on AT&T (NYSE: T) with a price target lowered to $34 from a previous $35. Shares lost 3.83 percent, closing at $34.90.

Analysts at JPMorgan upgraded Allergan (NYSE: AGN) to Overweight from Neutral with a price target raised to $190 from a previous $130. Meanwhile, analysts at Edward Jones downgraded Allergan to Sell from Hold. Shares hit new 52-week highs of $166.00 before closing the day at $165.69, up 1.25 percent.

Analysts at Deutsche Bank maintained a Buy rating on Amgen (NASDAQ: AMGN) with a price target raised to $144 from a previous $142. Meanwhile, analysts at Nomura maintained a Neutral rating on Amgen with a price target lowered to $129 from a previous $130. Shares lost 4.97 percent, closing at $113.37.

Analysts at Citigroup maintained a Buy rating on Bank of New York (NYSE: BK) with a price target raised to $40 from a previous $39. Shares gained 1.88 percent, closing at $34.21.

Analysts at Deutsche Bank maintained a Buy rating on Comcast (NASDAQ: CMCSA) with a price target raised to $66 from a previous $65. Meanwhile, analysts at Pacific Crest maintained an Outperform rating on Comcast with a price target lowered to $65 from a previous $66. Shares gained 0.75 percent, closing at $51.21.

Analysts at Deutsche Bank maintained a Hold rating on Cree (NASDAQ: CREE) with a price target lowered to $56 from a previous $51. Meanwhile, analysts at UBS maintained a Neutral rating on Cree with a price target lowered to $62 from a previous $66. Also, analysts at Canaccord Genuity maintained a Buy rating on Cree with a price target lowered to $74 from a previous $77. Shares hit new 52-week lows of $50.85 before closing the day at $51.02, down 12.11 percent.

Analysts at MKM Partners downgraded Eli Lilly (NYSE: LLY) to Neutral from Buy. Shares lost 0.75 percent, closing at $59.58.

Analysts at Bank of America maintained a Buy rating on General Motors (NYSE: GM) with a price target lowered to $43 from a previous $46. Shares gained 0.50 percent, closing at $34.40.

Analysts at Nomura maintained a Buy rating on Gilead Sciences (NASDAQ: GILD) with a price target raised to $130 from a previous $121. Meanwhile, analysts at Deutsche Bank maintained a Buy rating on Gilead with a price target raised to $135 from a previous $132. Shares gained 1.39 percent, closing at $73.87.

Analysts at Sterne Agee maintained an Underperform rating on Intuitive Surgical (NASDAQ: ISRG) with a price target lowered to $360 from a previous $440. Taking the other side, analysts at JPMorgan maintained an Overweight rating on Intuitive Surgical with a price target lowered to $500 from a previous $550. Shares lost 11.46 percent, closing at $373.93.

Related: Intuitive Surgical Plunges On Weak Sales Of Da Vinci Systems

Analysts at Longbow Research upgraded Lumber Liquidators (NYSE: LL) to Buy from Neutral with a $110 price target. Shares lost 1.44 percent, closing at $86.98.

Analysts at Deutsche Bank maintained a Buy rating on McDonald's (NYSE: MCD) with a price target raised to $110 from a previous $105. Shares lost 0.19 percent, closing at $99.13.

Analysts at Citigroup maintained a Hold rating on Michael Kors (NASDAQ: KORS) with a price target raised to $107 from a previous $104. Shares lost 1.89 percent, closing at $91.44.

Analysts at Wunderlich maintained a Hold rating on Sirius XM Radio (NASDAQ: SIRI) with a price target lowered to $3.50 from a previous $3.80. Shares lost 1.86 percent, closing at $3.16.

Analysts at Citigroup maintained a Sell rating on The Travelers Company (NYSE: TRV) with a price target raised to $77 from a previous $71. shares gained 1.42 percent, closing at $88.12.

Analysts at Barclays maintained an Overweight rating on United Technologies (NYSE: UTX) with a price target raised to $135 from a previous $131. Analysts at JPMorgan, Credit Suisse and Morgan Stanley all maintained Outperform and Overweight ratings with price targets raised to $125 (from $124), $135 (from $130), $128 (from $123), respectively. Shares gained 0.39 percent, closing at $119.65.

Analysts at JPMorgan maintained an Overweight rating on Valeant Pharmaceuticals (NYSE: VRX) with a price target raised to $180 from a previous $170. Shares lost 2.08 percent, closing at $132.60.

Equities-Specific News of Note

Amazon.com (NASDAQ: AMZN) reached an agreement with HBO to stream popular programming such as The Sopranos and the Wire to Amazon Prime subscribers. Current shows airing on HBO will also be available on Amazon Prime but after a three-year window. Shares of Amazon lost 1.44 percent, closing at $324.58.

Related: Amazon/HBO Deal The Kind That Would Make Reed Hastings Jealous

Allergan (NYSE: AGN) has implemented a one-year stockholder rights plan (aka “poison pill”) as a result of Valeant's (NYSE: VRX) takeover bid in conjunction with Bill Ackman's Pershing square. Under the poison pill, Allergan investors will have the right to acquire discounted shares if any unauthorized investor accumulates a stake of ten percent or higher of Allergan stock. Shares of Allergan hit new 52-week highs of $166.00 before closing at $165.69 while shares of Valeant lost 2.08 percent, closing at $132.60.

Dish Network (NASDAQ: DISH) announced that it will debut a new Internet TV service as early as this summer for mobile devices at an estimated $20 to $30 charge per month. Shares gained 0.54 percent, closing at $59.74.

AIG (NYSE: AIG) has become the insurance provider to offer policies against cyber attacks which damage property and people. Shares gained 1.25 percent, closing at $51.64.

Lockheed Martin (NYSE: LMT) has won a $11.6 billion contract to supply Australia with 58 F-35 Joint Strike Fighters. Shares gained 3.43 percent, closing at $162.07.

Toyota (NYSE: TM) sold 2.58 million vehicles worldwide to hold the title of the world's largest seller by units. Shares lost 0.28 percent, closing at $108.12.

Hess (NYSE: HES) announced it will sell $1 billion worth of onshore and offshore natural gas and condensate fields assets in Thailand. Shares hit new 52-week highs of $88.87 before closing the day at $88.16, up 0.17 percent.

Winners of Note

This morning, Manpower (NYSE: MAN) reported its first quarter results. The company announced an EPS of $0.86, beating the consensus estimate of $0.68. Revenue of $4.90 billion beat the consensus estimate of $4.83 billion. Net earnings for the quarter rose to $70.1 million from $23.9 million in the same quarter last year. Manpower said that growth in its Europe business improved to over four percent in constant currency in the quarter, and exceeded three percent on an average daily basis. The company anticipates its second quarter EPS to be in a range of $1.26 to $1.34, above the consensus estimate of $1.21. Shares gained 7.10 percent, closing at $83.41.

This morning, Delta Air Lines (NYSE: DAL) reported its first quarter results. The company announced an EPS of $0.33, beating the consensus estimate of $0.29. Revenue of $8.92 billion was in-line with the consensus estimate. Net income for the quarter rose to $281 million from $85 million in the same quarter last year despite $163 million of non-cash tax expense now recognized after the reversal of the company's valuation allowance. Passenger traffic increased 3.5 percent during the quarter on a 1.7 percent increase in capacity. The company said that its fuel expenses fell $167 million from the same quarter last year as the average price of fuel was $3.03 per gallon. Shares hit new 52-week highs of $37.41 before closing the day at $37.07, up 6.07 percent.

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SunPower (NASDAQ: SPWR) will team up with Google to provide financing of $250 million for residential solar lease projects. The program will allow thousands of potential new consumers to finance solar power systems. Shares gained 7.18 percent, closing at $31.48.

Popular (NASDAQ: BPOP) has agreed to sell its operations in Chicago, Central Florida and Southern California to concentrate on its mainland business in New York and South Florida. The company said that the sales will result in a net premium of around $25 billion along with a goodwill write-down of around $160 million and restructuring charges of $53 million. Shares gained 7.57 percent, closing at $31.68.

According to Israeli based Globes, Starbucks is in advanced talks to purchase a ten percent stake of Israeli based SodaStream (NASDAQ: SODA) at a potential 30 percent premium over the current market price. Shares of SodaStream gained 10.71 percent, closing at $44.76.

Decliners of Note

This morning, Federal-Mogul (NASDAQ: FDML) reported its first quarter results. The company announced an EPS of $0.27, missing the consensus estimate of $0.33. Revenue of $1.78 billion missed the consensus estimate of $1.82 billion. Net income for the quarter from continuing operations rose to $40 million from a loss of $34 million in the same quarter last year. The company successfully secured $2.6 billion to refinance maturating debt including a term loan of $700 million due in April 2018 and $1.9 billion due in 2021. According to analysts at Gabelli & Co, aftermarket sales were “tight relative to expectations given the terrible winter weather that should have helped the chassis, brakes, and wiper business.” Shares lost 9.48 percent, closing at $16.81.

Investors showed concern over Amazon.com's agreement with HBO to stream HBO content on Amazon Prime. Shares of Netflix lost 5.20 percent, closing at $353.50.

Earnings of Note

This morning, Thermo Fisher Scientific (NYSE: TMO) reported its first quarter results. The company announced an EPS of $1.53, beating the consensus estimate of $1.40. Revenue of $3.90 billion beat the consensus estimate of $3.74 billion. Net income for the quarter rose to $543.1 million from $336.2 million in the same quarter last year as the company launched new Thermo Scientific and Life Technologies products, including a new version of Chromeleon chromatography data system. The company raised its full year revenue guidance to $16.84 billion to $17.00 billion from a previous guidance of $16.63 billion to $16.83 billion. The company also raised its EPS guidance to a range of $6.80 to $6.95 from a previous range of $6.70 to $6.90. Shares lost 0.80 percent, closing at $119.39.

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This morning, EMC Corporation (NYSE: EMC) reported its first quarter results. The company announced an EPS of $0.35, in-line with the consensus estimate. Revenue of $5.48 billion beat the consensus estimate of $5.43 billion. Net income for the quarter fell to $728 million from $850 million in the same quarter last year as the company's core Information Storage ops saw its sales fall three percent year over year after growing ten percent in the previous quarter. EMS increased its full year revenue guidance to $24.575 billion from a previous $24.50 billion. However, the company lowered its full year guidance to $1.90 from a previous $1.95, below the consensus estimate of $1.94. Shares lost 3.18 percent, closing at $25.91.

This morning, General Dynamics (NYSE: GD) reported its first quarter results. The company announced an EPS of $1.71, beating the consensus estimate of $1.64. Revenue of $7.32 billion beat the consensus estimate of $7.20 billion. Net profit for the quarter rose to $595 million from $571 million in the same quarter last year driven by Aerospace whose revenue rose 19.5 percent year over year to $2.125 billion. Funded backlog at the end of first-quarter 2014 was $48.3 billion, and total backlog was $56 billion, a more than 20 percent increase from year-end 2013. The company estimates that its total potential contract value which is a sum of all backlog components was $84.7 billion at the end of the quarter. Shares gained 3.28 percent, closing at $111.58.

This morning, Procter & Gamble (NYSE: PG) reported its third quarter results. The company announced an EPS of $1.04, beating the consensus estimate of $1.01. Revenue of $20.56 billion missed the consensus estimate of $20.68 billion. Gross profit for the quarter fell to $9.958 billion from $10.25 billion in the same quarter last year and the company faced unfavorable exchange rates in all of its segments. Organic sales grew three percent and were at or above year ago levels in each segment. Fabric Care and Home Care saw the largest volume gains of six percent. The company reaffirmed previous objectives of growing organic sales by three percent to four percent and to improve core earnings per share of three percent to five percent for the fiscal year. Shares lost 0.31 percent, closing at $80.36.

This morning, Dow Chemicals (NYSE: DOW) reported its first quarter results. The company announced an EPS of $0.79, beating the consensus estimate of $0.71. Revenue of $14.46 billion missed the consensus estimate of $14.72 billion. Net income rose to $964 million from $550 million in the same quarter last year as emerging geographies grew sales by three percent with volume growth in China up seven percent. Price gains in North America were partially offset by volume declines due to weather related issues. The company noted strong gains in Performance Plastics, Agricultural Sciences and Coatings and Infrastructure Solutions. Shares gained 0.88 percent, closing at $49.37.

This morning, Biogen (NYSE: BIIB) reported its first quarter results. The company announced an EPS of $2.47, missing the consensus estimate of $2.58. Revenue of $2.13 billion beat the consensus estimate of $2.0 billion. GAAP net income for the quarter rose to $480 million from $426.7 million in the same quarter last year as sales of AVONEX rose two percent year over year to $761 million and sales of RYSABRI rose 41 percent to $441 million over the same time period. Biogen projected its revenue growth for the full year fiscal 2014 to be approximately 26 percent to 28 percent and GAAP diluted EPS to be in a range of $9.85 to $9.95. Shares gained 0.18 percent, closing at $306.75.

This morning, Boeing (NYSE: BA) reported its first quarter results. The company announced an EPS of $1.76, beating the consensus estimate of $1.56. Revenue of $20.46 billion missed the consensus estimate of $20.56 billion. Net earnings for the quarter fell to $965 million from $1.106 billion in the same quarter last year as revenues within Boeing Defense, Space & Security declined six percent year over year to $7.63 billion dragging down its operating earnings by 6 percent to $778 million. Commercial Airplanes revenues rose 19 percent to $12.74 billion. The company delivered 161 planes in the quarter compared to 137 in the same quarter last year. The company booked 235 net orders with a backlog of over 5,100 aircrafts valued at $374 billion. Shares gained 2.41 percent, closing at $130.63.

After the market closed, Facebook (NASDAQ: FB) reported its first quarter results. The company announced an EPS of $0.34, beating the consensus estimate of $0.24. Revenue of $2.5 billion beat the consensus estimate of $2.34 billion. Shares were trading higher by 2.90 percent at $63.14 following the earnings release.

After the market closed, Qualcomm (NASDAQ: QCOM) reported its second quarter results. The company announced an EPS of $1.31, beating the consensus estimate of $1.22. Revenue of $6.37 billion missed the consensus estimate of $6.48 billion. Shares were trading lower by 3.48 percent at $77.90 following the earnings release.

After the market closed, Apple (NASDAQ: AAPL) reported its second quarter results. The company announced an EPS of $11.62, beating the consensus estimate of $10.18. Revenue of $45.65 billion beat the consensus estimate of $45.53 billion. Shares were trading higher by more than 7 percent to over $563 following the earnings release. The company also announced a 7-for-1 stock split and increased its dividend by eight percent, from $3.05 to $3.29 per share.

Quote of the Day

"I never thought I'd be defending him, but I don't think there's anything wrong with that. We have our differences, but I never said he's not a smart guy. I think the concept of this is good. I hope it works out better for him than Herbalife did, and I think it will. There's nothing wrong with making a bid for a company and using someone else's funds." - Carl Icahn defending Bill Ackman.

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