Market Overview

Market Wrap For May 6: Dow Suffers Triple-Digit Point Loss, Nasdaq Underperforms Once Again

Market Wrap For May 6: Dow Suffers Triple-Digit Point Loss, Nasdaq Underperforms Once Again
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U.S. stocks declined on Tuesday after the Dow and S&P 500 closed near all time highs.

Momentum names such as Twitter, Facebook, Tesla and others saw heavy losses. Not helping the cause was poor earnings by American International Group on Monday which dragged the financial sector lower.

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  • The Dow lost 0.78 percent, closing at 16,401.02.
  • The S&P 500 lost 0.90 percent, closing at 1,867.72.
  • The Nasdaq lost 1.38 percent, closing at 4,080.76.
  • Gold lost 0.13 percent, trading at $1,307.60 an ounce.
  • Oil gained 0.15 percent, trading at $99.63 a barrel.
  • Silver lost 0.03 percent, trading at $19.57 an ounce.

News of Note

ICSC Retail Store Sales declined two percent week over week, compared to a 1.6 percent gain last week.

The March U.S. international trade deficit narrowed to -$40.4 billion from -$41.9 billion in February.

Redbook Chain Store Sales rose 4.4 percent year over year compared to a gain of 3.8 percent last week.

Analyst Upgrades and Downgrades of Note

Analysts at Citigroup upgraded Anadarko Petroleum (NYSE: APC) to Buy from Neutral. Shares hit new 52-week highs of $104.81 before closing the day at $102.73, up 3.26 percent.

Analysts at RBC Capital maintained an Outperform rating on Apple (NASDAQ: AAPL) with a price target raised to $645 from a previous $625. Shares hit new 52-week highs of $604.41 before giving back gains and closing the day at $594.44, down 1.08 percent.

Analysts at Morgan Stanley maintained an Overweight rating on EOG Resources (NYSE: EOG) with a price target raised to $130 from a previous $120. Shares hit new 52-week highs of $106.50 before closing the day at $103.63, up 4.41 percent.

Analysts at Wedbush initiated coverage of King Digital Entertainment (NYSE: KING) with an Outperform rating and $25 price target. Shares lost 1.52 percent, closing at $18.76.

Analysts at Wunderlich maintained a Buy rating on RetailMeNot (NASDAQ: SALE) with a price target raised to $48 from a previous $44. Shares lost 7.73 percent, closing at $30.18.

Analysts at MKM Partners downgraded Target (NYSE: TGT) to Neutral from Buy with a price target lowered to $63 from a previous $71. Shares lost 3.72 percent, closing at $57.64.

Analysts at Wunderlich maintained a Hold rating on Texas Roadhouse (NASDAQ: TXRH) with a price target lowered to $28 from a previous $30. Shares finished the day unchanged at $24.72.

Analysts at Rafferty Capital upgraded UBS (NYSE: UBS) to Buy from Hold. Shares gained 0.34 percent, closing at $20.91.

Analysts at Blair initiated coverage of Zoe's Kitchen (NYSE: ZOES) to Outperform with a $35 price target. Also initiated coverage (following the quiet period) is Piper Jaffray with an Overweight rating and $32 price target. Analysts at Stifel Nicolaus has a Buy rating and $42 price target while analysts at Jefferies began coverage with a Hold rating and $25 price target. Shares lost 4.55 percent, closing at $27.67.

Equities-Specific News of Note

Delta Air Lines (NYSE: DAL) said that it will buy back $2 billion worth of shares through 2016 and raise its quarterly dividend to $0.09 per share from $0.06. Shares hit new 52-week highs of $38.64 before closing the day at $37.69, up 0.37 percent.

Related: Flying High: Delta Air Lines Hikes Dividend And Buybacks In An Update To Investors

AstraZeneca (NYSE: AZN) published an update to its growth strategy and provided long-term revenue guidance for five platforms including $8 billion in diabetes related sales by 2023, $8 billion in respiratory sales by 2023 and $3.5 billion in sales for Brillinta by 2023. Shares lost 0.94 percent, closing at $79.12.

Wal-Mart's (NYSE: WMT) online sales rose by 30 percent to $10 billion for the year ending January 31, outpacing Amazon.com's (NASDAQ: AMZN) 20 percent growth. However, Amazon's $67.8 billion in annual sales still dwarfs those of Wal-Mart. Shares of Wal-Mart lost 0.78 percent, closing at $78.01 while shares of Amazon lost 4.09 percent, closing at $297.38.

Xerox (NYSE: XRX) has agreed to purchase ISG Holdings, a provider of workers' compensation software and services for insurance industry clients for $225 million in cash. Shares lost 2.17 percent, closing at $11.72.

General Motors (NYSE: GM) sold 278,263 cars in China, representing a 6.3 percent rise which also happens to be the slowest growth rate in over a year. Shares finished the day unchanged at $34.75.

According to analysts at Barclays, Tesla Motors (NASDAQ: TSLA) will face a serious competitive threat from BMW with its i3 EV and i8 plug-in hybrid vehicles. Shares of Tesla lost 4.31 percent, closing at $207.28.

According to Reuters, B/E Aerospace (NASDAQ: BEAV) is not in advanced talks with any one company to sell parts of or the entire company. Shares gained 0.78 percent, closing at $97.98.

Related: Is B/E Aerospace Worth $140 Per Share In A Sale? One Analyst Thinks So

Morgan Stanley (NYSE: MS) received a $5 million fine related to charges that the bank has not provided adequate training to staff on 83 IPOs (including Facebook) from 2012 to mid 2013. Shares lost 2.03 percent, closing at $29.46.

Google (NASDAQ: GOOG)(NASDAQ: GOOGL) has purchased Adometry, a developer of an online ad measurement platform to better determine if an ad was viewed and turned in to a sale or not. Shares lost 2.40 percent, closing at $515.14.

Coca-Cola (NYSE: KO) announced it will remove brominated vegetable oil from its products following some negative publicity by various consumer groups. Shares lost 0.66 percent, closing at $40.49.

Merck (NYSE: MRK) has agreed to sell its consumer care business which includes brands like Coppertone, Claritin and Afrin to Bayer for $14.2 billion. Shares lost 2.59 percent, closing at $57.11.

According to Bloomberg, Chesapeake Energy's (NYSE: CHK) CEO Doug Lawler hints that it plans to pursue international projects, a contrast from the company's founder Aubrey McClendon who never wanted to pursue overseas projects. Shares gained 0.14 percent, closing at $28.35.

Kinder Morgan (NYSE: KMP) plans to invest around $670 million to grow its carbon dioxide infrastructure by expanding its 500-mile Cortez pipeline that transports CO2 from Colorado to New Mexico and Texas. Shares lost 0.68 percent, closing at $74.91.

Wells Fargo (NYSE: WFC) will begin offering two new American Express cards geared towards big everyday spenders and frequent fliers which offer up to an extra 50 percent in reward points. Shares lost 0.95 percent, closing at $49.09.

Ford (NYSE: F) announced it will halt production in Venezuela due to an unfavorable currency and material shortages. Shares lost 1.14 percent, closing at $15.56

Winners of Note

This morning, Office Depot (NYSE: ODP) reported its first quarter results. The company announced an EPS of $0.07, beating the consensus estimate of $0.03. Revenue of $4.35 billion beat the consensus estimate of $4.28 billion. Net income for the quarter rose to $38 million from $18 million in the same quarter a year ago but including special items (such as a $96 million in merger related costs) the company posted an operating loss of $79 million and a $109 million net loss attributable to shareholders. Office Depot announced that it plans to close at least 400 stores in the U.S. throughout 2016 which will add $75 million in annual run-rate synergies. The company said that it expects to generate full year 2014 adjusted operating income of “not less than $160 million” which is higher than previous guidance of $140 million. Shares gained 15.83 percent, closing at $4.83.

Decliners of Note

This morning, Nu Skin Enterprises (NYSE: NUS) reported its first quarter results. The company announced an EPS of $1.05, beating the consensus estimate of $0.94. Revenue of $671.1 million beat the consensus estimate of $656.82. Net income for the quarter rose to $64.26 million from $54.28 million in the same quarter a year ago. Sales in China rose 63 percent year over year to $278.9 million, while sales in North Asia grew five percent to $195.5 million. Sales in the Americas saw a six percent gain to $79.9 million while total actives worldwide rose 12 percent to 1.122 million. Nu Skin issued guidance and expects its EPS to be $1.25, below the consensus estimate of $1.43. Revenue is guided to be $700 million, below the consensus estimate of $789.5 million. The company claimed that its lower than expected guidance is due to difficulties in forecasting how the business will perform in China, where it was permitted to resume operations following a brief ban. Shares lost 7.08 percent, closing at $81.38.

Pandora Media (NYSE: P) said that its April listener hours fell to 1.7 billion from 1.71 billion in March but are up 30 percent year over year. Active listener hours rose to 76 million from 75.3 million in March and 70.1 million a year ago. Pandora will no longer release monthly metrics after its May numbers as announced earlier this year. Shares lost 8.94 percent, closing at $22.52. Shares lost 8.94 percent, closing at $22.52.

As previously reported, Twitter (NYSE: TWTR) entered the post-lockup expiration in which approximately 81 percent of Twitter's shares are eligible for sale by insiders and employees. Major shareholders including Jack Dorsey, Evan Williams, Dick Costolo and others have pledged not to sell their 205 million shares, however that leaves an additional 275 million shares held by others who made no similar commitment. The average daily three month volume of 13.251 million pales in comparison to today's 134.174 million shares trading hands. Shares hit new 52-week lows of $31.72 before closing the day at $31.85, down 17.81 percent.

Related: Twitter Hit Hard Amid Insider Sales, Lock-Up Expiration

Earnings of Note

This morning, The Mosaic Company (NYSE: MOS) reported its first quarter results. The company announced an EPS of $0.54, missing the consensus estimate of $0.59. Revenue of $1.98 billion missed the consensus estimate of $2.5 billion. Net earnings for the quarter fell to $218 million from $380 million in the same quarter a year ago as increased phosphate sales only partially offset lower selling prices. In the quarter the company sold 2.7 million metric tons of phosphate (higher than previous guidance of 2.3 million to 2.6 million) but at a price of $414 per ton, down from $491 per ton a year ago. The company sold 2.4 million metric tons of potash at an average selling price of $267, down from $376 a year ago. The company plans to cut 500 jobs in the next year as part of a plan to cut $500 million in costs over the next five years. Shares lost 2.11 percent, closing at $48.66.

This morning, DIRECTV (NYSE: DTV) reported its first quarter results. The company announced an EPS of $1.63, beating the consensus estimate of $1.48. Revenue of $7.86 billion missed the consensus estimate of $7.91 billion. Net income for the quarter fell to $561 million from $690 million in the same quarter a year ago as the company noted a $281 million after tax charge resulting from the revaluation of the net monetary assets of the company's subsidiary in Venezuela. The company saw strong gains in its U.S. segment as revenue rose 4.9 percent to $6.087 billion with the average monthly revenue per subscriber rising 4.3 percent to $100.16. In the quarter, the company added 12,000 net additions in the U.S. which fell short of the 14,000 estimate analysts were expecting. Shares hit new 52-week highs of $82.88 before closing the day at $81.74, up 2.38 percent.

After the market closed, Whole Foods Market (NYSE: WFM) reported its second quarter results. The company announced an EPS of $0.38, missing the consensus estimate of $0.41. Revenue of $3.3 billion missed the consensus estimate of $3.34 billion. Shares were trading lower by 10.34 percent at $42.99 following the earnings release.

After the market closed, FireEye (NASDAQ: FEYE) reported its first quarter results. The company announced an EPS of -$0.53, in-line with the consensus estimate. Revenue of $74 million beat the consensus estimate of $71.65 million. Shares were trading lower by 8.43 percent at $34.00 following the earnings release.

After the market closed, First Solar (NASDAQ: FSLR) reported its first quarter results. The company announced an EPS of $1.10, beating the consensus estimate of $0.52. Revenue of $950 million beat the consensus estimate of $837.9 million. Shares were trading higher by 3.63 percent at $69.90 following the earnings release.

After the market closed, Electronic Arts (NYSE: EA) reported its fourth quarter results. The company announced an EPS of $0.48, beating the consensus estimate of $0.11. Revenue of $914 million beat the consensus estimate of $812.09 million. Shares were trading higher by 15.01 percent at $32.26 following the earnings release.

After the market closed, Groupon (NASDAQ: GRPN) reported its first quarter results. The company announced an EPS of -$0.01, beating the consensus estimate of -$0.03. Revenue of $757.6 million beat the consensus estimate of $738.4 million. Shares were trading lower by 7.89 percent at $6.19 following the earnings release.

After the market closed, Disney (NYSE: DIS) reported its second quarter results. The company announced an EPS of $1.11, beating the consensus estimate of $0.96. Revenue of $11.64 billion beat the consensus estimate of $11.2 billion. Shares were trading higher by 1.01 percent at $81.85 following the earnings release.

Quote of the Day

David Einhorn of Greenlight Capital opened his segment at the Sohn Conference Monday by announcing that his segment would run far over its allotted time and told the audience that “if they're bored, go home.”

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