Market Wrap For May 2: Markets Slip On Ukraine Tensions Despite Positive Jobs Data
U.S. stocks declined as tensions continue to mount in Ukraine.
Russia requested an emergency session with the United Nations Security Council over a recent operation conducted by Ukraine where at least seven people were killed in the town of Slavyansk.
Ukraine's interim President Oleksandr Ruchynov said that pro-Russian rebels had been killed in the operation while insurgents had shot down two helicopters.
On the domestic front, the U.S. Department of Labor announced that 288,000 jobs in April were created. Analysts were expecting the addition of 210,000 jobs in the month.
- The Dow lost 0.28 percent, closing at 16,512.89.
- The S&P 500 lost 0.13 percent, closing at 1,881.14.
- The Nasdaq lost 0.09 percent, closing at 4,123.90.
- Gold gained 1.16 percent, trading at $1,298.30 an ounce.
- Oil gained 0.35 percent, trading at $99.77 a barrel.
- Silver gained 2.19 percent, trading at $19.46 an ounce.
News of Note
April Nonfarm Payrolls gained 288,000, above the consensus of 210,000 and March's gain of 203,000.
March Factory Orders rose 1.1 percent on month, below expectations for a 1.4 percent rise and February's 1.5 percent gain.
The Federal Reserve released a list of 15 U.S. based and foreign financial firms that could potentially pose “elevated risks to U.S. financial stability” and will receive extra supervision by a special unit named “The Large Institution Supervision Coordinating Committee.”
According to Re/code, and reported by CNBC, Alibaba could file for its IPO as early as next week.
Canada's Natural Resources Minister Greg Rickford announced that the Canadian government has no plans to issue a NAFTA challenge over the U.S. delaying its decision on approving the Keystone XL pipeline project.
Japan's unemployment rate remained unchanged in March at 3.6 percent.
Eurozone manufacturing PMI rose to 53.4 in April from 53 in March.
Eurozone's unemployment rate remained unchanged in March at 11.8 percent and coming in below estimates of 11.9 percent.
Analyst Upgrades and Downgrades of Note
Analysts at Citigroup maintained a Hold rating on Buffalo Wild Wings (NASDAQ: BWLD) with a price target raised to $158 from a previous $142. Shares gained 1.17 percent, closing at $146.22.
Analysts at Barclays maintained an Equal-weight rating on CME Group (NYSE: CME) with a price target lowered to $78 from a previous $82. Shares lost 1.57 percent, closing at $69.57.
Analysts at Bank of America maintained an Underperform rating on ConocoPhillips (NYSE: COP) with a price target raised to $77 from a previous $75. Taking the opposite side, analysts at Barclays maintained an Overweight rating on ConocoPhillips with a price target raised to $88 from a previous $83. Shares hit new 52-week highs of $76.85 before closing the day at $76.52, up 1.99 percent.
Analysts at Citigroup downgraded DirectTV (NYSE: DTV) to Neutral from Buy. Shares lost 1.10 percent, closing at $79.87.
Analysts at Cantor Fitzgerald maintained a Buy rating on Expedia (NASDAQ: EXPE) with a price target raised to $82 from a previous $80. Shares lost 3.68 percent, closing at $71.15.
Analysts at Bank of America maintained a Buy rating on Exxon Mobil (NYSE: XOM) with a price target raised to $114 from a previous $110. Shares hit new 52-week highs of $102.91 before closing the day at $102.01, up 0.59 percent.
Analysts at Morgan Stanley maintained a Buy rating on Groupon (NASDAQ: GRPN) with a price target lowered to $13 from a previous $14. Shares gained 0.14 percent, closing at $7.09.
Analysts at Needham upgraded InvenSense (NASDAQ: INVN) to Buy from Hold with a $22 price target. Shares lost 4.66 percent, closing at $19.63.
Analysts at Nomura maintained a Buy rating on MasterCard (NYSE: MA) with a price target lowered to $91 from a previous $93.50. Shares lost 0.63 percent, closing at $73.78.
Analysts at Nomura initiated coverage of Michael Kors (NASDAQ: KORS) with a Buy rating and $116 price target. Shares gained 0.87 percent, closing at $93.21.
Analysts at Societe Generale upgraded Oracle (NYSE: ORCL) to Buy from Hold with a price target raised to $47 from a previous $38. Shares lost 0.39 percent, closing at $40.81.
Analysts at Barclays maintained an Overweight rating on T-Mobile U.S. (NYSE: TMUS) with a price target raised to $37 from a previous $36. Meanwhile, analysts at Nomura maintained a Neutral rating on T-Mobile with a price target raised to $30 from a previous $27.50. Shares gained 1.11 percent, closing at $32.00.
Equities-Specific News of Note
Pfizer (NYSE: PFE) has written a letter to the Prime Minister of the United Kingdom David Cameron confirming its intentions to complete AstraZeneca's (NYSE: AZN) research and development facilities in Cambridge and to maintain AstraZeneca's scientific leading position in the country intact. Following Pfizer's letter (and confirming it had raised its bid offer to $106 billion), AstraZeneca said that “Pfizer's proposal would dramatically dilute AstraZeneca shareholders' exposure to our unique position and would create risks around its delivery” in a statement rejecting Pfizer's offer. Shares of Pfizer lost 1.28 percent, closing at $30.75 while shares of AstraZeneca lost 0.09 percent, closing at $81.02.
Yum Brands (NYSE: YUM) launched a new set of TV commercials to promote Taco Bell's breakfast offering. Shares lost 0.07 percent, closing at $76.20.
Intuitive Surgical (NASDAQ: ISRG) announced it will pay back $1 billion worth of shares from Goldman Sachs. Shares gained 1.24 percent, closing at $363.59.
The National Bank of Canada will give Canadian Solar (NASDAQ: CSIQ) a C$115.5 million in short-term financing to help continue with the construction of three solar plants in Ontario. Shares gained 0.11 percent, closing at $27.54.
Winners of Note
This morning, Cooper Tire & Rubber (NYSE: CTB) reported its first quarter results. The company announced an EPS of $0.71, beating the consensus estimate of $0.49. Revenue of $796 million missed the consensus estimate of $836.15 million. Net income attributable to the company for the quarter fell to $45 million from $56 million in the same quarter a year ago as the company experienced an unfavorable pricing mix which was not fully offset by lower raw material costs and higher selling, general and administrative costs. The company expects its second quarter raw material prices to be roughly flat compared to the first quarter which have declined around four percent from the previous quarter. Shares gained 6.76 percent, closing at $27.48.
Decliners of Note
Endocyte (NASDAQ: ECYT), a biopharmaceutical company with a focus on treating cancer and inflammatory and its collaborative partner Merck (NYSE: MRK) announced that its phase 3 trial evaluating a cancer drug vintafolide has been recommended to be stopped by the Data Safety Monitoring Board following an interim analysis. Shares of Endocyte plunged to new 52-week lows of $6.50 before closing the day at $6.62, down 61.91 percent. Shares of Merck lost 2.35 percent, closing at $58.22.
On Thursday LinkedIn (NYSE: LNKD) reported its first quarter results. The company announced an EPS of $0.38, beating the consensus estimate of $0.34. Revenue of $473.19 million beat the consensus estimate of $466.69 million. Net income for the quarter turned negative to a net loss of $13.4 million from a net income of $22.6 million in the same quarter a year ago due to higher costs of employee stock compensation and other costs and expenses such as hiring employees and developing new services. In the quarter, LinkedIn added 19 million users bringing its total to 296 million. Total page views rose to 11.5 billion from 11.1 billion a year ago. LinkedIn offered downside guidance and sees its second quarter revenue to be $500 million to $505 million, below the $505.1 million consensus estimate. Full year 2014 revenue is guided to be $2.06 billion to $2.08 billion, below the $2.11 billion consensus. Analysts at UBS upgraded LinkedIn (NYSE: LNKD) to Buy from Neutral with a $225 price target. Meanwhile, analysts at Stifel Nicolaus maintained a Buy rating with a price target lowered to $240 from a previous $285, as did analyst at Wunderlich who also maintained a Buy rating with a price target lowered to $250 from a previous $280. Also, analysts at Credit Suisse maintained an Outperform rating with a price target lowered to $270 from a previous $274. Shares lost 8.37 percent, closing at $147.73.
Earnings of Note
This morning, CVS Caremark (NYSE: CVS) reported its first quarter results. The company announced an EPS of $1.02, missing the consensus estimate of $1.03. Revenue of $32.7 billion beat the consensus estimate of $32.31 billion. Net income for the quarter rose to $1.13 billion from $954 million in the same quarter a year ago as the company's Pharmacy Services division saw its sales rise 10.3 percent year over year to $20.2 billion. The Retail Pharmacy segment grew sales by 2.7 percent to $16.5 billion from a year ago driven partially by increased generic drugs dispensed and slower growth in expenses. CVS reaffirmed previous guidance and expects its full year 2014 EPS to be $4.36 to $4.50 and to deliver free cash flow of $5.50 billion to $5.8 billion. Shares gained 1.05 percent, closing at $73.86.
This morning, Chevron (NYSE: CVX) reported its first quarter results. The company announced an EPS of $2.36, missing the consensus estimate of $2.47. Revenue of $53.26 billion missed the consensuses estimate of $54.47 billion. Net income for the quarter fell to $4.51 billion from $6.18 billion in the same quarter a year ago as the company's oil-equivalent production fell to 2.59 million barrels per day from 2.65 million barrels per day a year ago. Chevron's upstream earnings declined by 27 percent to $4.31 billion while downstream revenue gained 1.3 percent to $710 million. The company also noted its lower earnings were due to lower prices for crude oil and weather related issues. Chevron expects to see production growth in 2015 and beyond as several new initiatives such as the Big Foot projects in the Gulf of Mexico will begin production in mid-2015 and the Jack/St. Malo project will go online in late 2014. Shares lost 0.18 percent, closing at $124.72.
Quote of the Day
"Patience is a virtue, catch it if you can... rarely in a women, never in a man!" -Founder of Seabreeze Partners Management Douglas Kass speaking with the Benzinga #Premarket Prep on Thursday morning.
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