Market Wrap For April 28: Apple Hits New 52-Week Highs In a Volatile Start To the Trading Week
U.S. stocks ended the day mostly positive in a volatile trading session as the Nasdaq rebounded from a one percent decline, finishing the day almost flat.
The Dow traded higher by as much as 138 points but still ended the day modestly higher as Pfizer's massive $100 billion takeover plans gave the index a much appreciated boost.
Both the Dow and the S&P 500 hit or breached their 50-day moving average as reports surfaced that Russian troops returned to their bases from the Ukraine border.
- The Dow gained 0.53 percent, closing at 16,448.74.
- The S&P 500 gained 0.32 percent, closing at 1,869.42.
- The Nasdaq lost 0.03 percent, closing at 4,074.40.
- Gold lost 0.32 percent, trading at $1,296.60 an ounce.
- Oil gained 0.39 percent, trading at $100.99 a barrel.
- Silver lost 0.51 percent, trading at $19.59.
News of Note
March Pending Home Sales rose 3.4 percent to 97.4 from 94.2 in February.
April Dallas Fed Manufacturing Outlook rose to 11.7 from 4.9 and topped expectations of 6.0.
Analyst Upgrades and Downgrades of Note
Analysts at Stifel Nicolaus downgraded Allergan (NYSE: AGN) to Hold from Buy. shares hit new 52-week highs of $168.66 before giving back gains and closing the day at $166.03, down 1.26 percent.
Analysts at Jefferies maintained a Buy rating on Biogen (NASDAQ: BIIB) with a price target lowered to $380 from a previous $398. Shares lost 0.94 percent, closing at $283.12.
Analysts at Citigroup maintained a Hold rating on Cliffs Natural Resources (NYSE: CLF) with a price target lowered to $19 from a previous $22. Shares lost 3.89 percent, closing at $17.30.
Analysts at Credit Suisse maintained a Neutral rating on Cree (NASDAQ: CREE) with a price target lowered to $50 from a previous $60. Shares hit new 52-week lows of $45.10 before closing the day at $46.63, down 2.73 percent.
Analysts at Credit Suisse upgraded Deckers Outdoor (NASDAQ: DECK) to Neutral from Underperform with a price target raised to $82 from a previous $61. Shares lost 2.85 percent, closing at $80.79.
Analysts at Deutsche Bank maintained a Hold rating on Kellogg (NYSE: K) with a price target raised to $64 from a previous $63. Shares gained 0.84 percent, closing at $67.27.
Analysts at Citigroup maintained a Hold rating on McDonald's (NYSE: MCD) with a price target raised to $106 from a previous $100. shares lost 0.42 percent, closing at $100.31.
Analysts at Credit Suisse maintained an Outperform rating on Merck (NYSE: MRK) with a price target raised to $57 from a previous $54. shares lost 0.82 percent, closing at $56.77.
Analysts at Credit Suisse maintained a Neutral rating on Treehouse Foods (NYSE: THS) with a price target raised to $72 from a previous $70. Shares gained 0.87 percent, closing at $74.02.
Analysts at Credit Suisse maintained a Neutral rating on Whole Foods Market (NYSE: WFM) with a price target lowered to $50 from a previous $55. Shares lost 1.40 percent, closing at $49.94.
Analysts at Credit Suisse maintained an Underperform rating on Yingli Green Energy (NYSE: YGE) with a price target lowered to $4 from a previous $5. Shares lost 4.76 percent, closing at $3.51.
Equities-Specific News of Note
Apple (NASDAQ: AAPL) plans to raise $17 billion in international and domestic bond markets to help finance its recently announced stock-repurchase program. Shares hit new 52-week highs of $595.75 before closing the day at $594.09, up 3.87 percent.
The FCC intends to add 128.5MHz of spectrum as a guideline for approving M&A activity. Sprint (NYSE: S) owns 101 MHZ of the spectrum from recent acquisitions making any potential further M&A activity with T-Mobile USA (NYSE: TMUS) difficult. Shares of Sprint lost 4.86 percent, closing at $7.44 while shares of T-Mobile USA lost 3.24 percent, closing at $28.11.
Barrick Gold (NYSE: ABX) announced that Newmont Mining (NYSE: NEM) has terminated merger discussions which have been initiated last week. Newmont Mining's board has stated that the company is better off being independent while Barrick Gold believes a merger would be in the best interest of investors. Barrick Gold's Peter Munk described Newmont as being “extremely bureaucratic and not shareholder friendly” while Newmont said that the two companies never held a respectful relationship in the past. Shares of Barrick Gold lost 3.13 percent, closing at $17.33 while shares of Newmont lost 6.77 percent, closing at $24.66.
Netflix (NASDAQ: NFLX) is considering offering live programming featuring Chelsea Handler. Shares lost 2.44 percent, closing at $314.21.
Alibaba and a private equity firm co-founded by Alibaba chairman Jack Ma purchased an 18.5 percent stake in Youku (NASDAQ: YOKU) for $1.22 billion. Shares initially rose on the news in pre-market trading but later turned negative following news reports that China's State Administration of Press, Publication, Radio, Film and Television ordered online media platforms like Youku to cease streaming several American programming like The Big Bang Theory and The Good Wife. shares lost 5.47 percent, closing at $22.83.
Winners of Note
Pfizer (NYSE: PFE) confirmed that had placed a bid to purchase British based AstraZeneca (NYSE: AZN) in January for approximately $76.62, a 30 percent premium on shares at the time. AstraZeneca's Chairman Leif Johansson confirmed that Pfizer's Ian Read initially contacted the company in November over a potential combination and the two met in early January. Following brief discussions, AstraZeneca's board felt that Pfizer's offer was undervalued given its prospects and officially rejected the deal on January 12. Pfizer responded three days later that it was no longer actively considering an offer for AstraZeneca. In a conference call early Monday, Pfizer confirmed it is reconsidering its options regarding a potential acquisition of AstraZeneca and a new offer will need to be put on the table in the next 28 days per U.K. regulations. Shares of AstraZeneca hit new 52-week highs of $79.88 before closing the day at $76.99, up 12.13 percent. Shares of Pfizer gained 4.20 percent, closing at $32.04.
Forest Laboratories has agreed to acquire Furiex Pharmaceuticals (NASDAQ: FURX) for $1.1 billion. Under the proposed deal, Furiex shareholders will receive $95 per share in cash and up to $30 per share in Contingent Value Right (CVR) depending on whether or not Furiex's eluxadoline therapy receives FDA approval. Shares of Furiex closed at $80.15 on Friday and closed today at $103.05, up 28.57 percent.
Comcast has reached a deal with Charter Communications (NASDAQ: CHTR) to divest 3.9 million video customers if Comcast proceeds with an acquisition of Time Warner Cable. Charter will buy 1.4 million Time Warner customers directly for $7.3 billion in cash and 2.5 million Comcast customers will be spun off into a new cable company controlled by Charter. Also, Charter will trade 1.6 million of its customers to Comcast in return for 1.6 million current Time Warner subscribers. Charter would rank as the fourth largest pay-TV subscriber and the number two cable company. Shares of Charter gained 7.72 percent, closing at $140.05.
Decliners of Note
Bank of America (NYSE: BAC) has suspended its $4 billion share buyback program and previous plans to hike its dividend to $0.05 from $0.01. The bank took this action following a downward revision to its capital ratios which at 11.9 percent is 21 basis points lower than previously disclosed. Shares lost 6.24 percent, closing at $14.95.
This morning, Sohu.com (NYSE: SOHU) reported its first quarter results. The company announced an EPS of -$1.26, missing the consensus estimate of -$1.13. Revenue of $180.9 million beat the consensuses estimate of $362.92 million. GAAP net income for the quarter turned negative to a net loss of $56 million from a net income of $58 million in the same quarter a year ago as operating expenses rose 122 percent year over year due to marketing and promotional spend and new employee incentive plans. Brand ad sales rose 38 percent year over year to $111 million after growing 50 percent in the previous quarter while online game revenues fell two percent year over year to $163 million after growing nine percent in the previous quarter. Sohu issued guidance and sees its second quarter revenue to be in a range of $397 million to $411 million versus a consensus estimate of $409.1 million. EPS is guided to be in a range of -$1.25 to -$1.35, worse than the consensus estimate of -$0.62. Shares lost 6.72 percent, closing at $54.10.
National Oilwell Varco (NYSE: NOV) reported that its first quarter orders for new offshore rig equipment dropped 23 percent year over year to $2.33 billion. Backlog for new rig technology is expected to fall to $14 billion to $15 billion by the end of the year after hitting $16.4 billion during the first quarter, according to the company's CEO Clay Williams. Shares lost 7.38 percent, closing at $77.31.
Earnings of Note
This morning, Loews (NYSE: L) reported its first quarter results. The company announced an EPS of $0.63, missing the consensus estimate of $0.70. Revenue of $3.7 billion beat the consensus estimate of $3.67 billion. Net income for the quarter fell to $59 million from $242 million in the same quarter a year ago as the company booked an impairment loss of $193 million and income from operations of $7 million related to the pending sale of CNA's annuity and pension deposit business. Shares lost 0.86 percent, closing at $43.76.
This morning, Corning (NYSE: GLW) reported its first quarter results. The company announced an EPS of $0.31, beating the consensus estimate of $0.30. Revenue of $2.39 billion beat the consensus estimate of $2.30 billion. Net income for the quarter fell to $301 million from $494 million in the same quarter a year ago as the company set aside more for taxes than a year ago. The company benefited from its deal with Samsung as Display Technologies sales rose 58 percent year over year to $1 billion. Specialty Materials was expected to post flat growth and saw sales slightly increases to $261 million as did Life Sciences sales rising slightly to $210 million. Shares gained 1.11 percent, closing at $20.97.
Quote of the Day
"There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second." - Jeff Bezos, Amazon.com Chief Executive Officer, comments made in 2011.
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