Market Wrap For May 23: Markets Marginally Higher; S&P 500 Closes Above 1,900
U.S. stocks were little moved with the news-flow light, as would be expected prior to a long-weekend.
In fact, Thursday's trading session proved to be the second lowest volume day of 2014.
The S&P 500 closed above 1,900 and came within striking distance of matching its intraday all time highs of 1,902.17.
Ukraine will hold elections on Sunday for presidential and mayoral elections. Petro Poroshenko, the “billionaire chocolate king” is currently leading the presidential polls with 34 percent of the vote.
As a reminder, U.S. markets will close on Monday in observance of Memorial Day.
- The Dow gained 0.38 percent, closing at 16,606.27
- The S&P 500 gained 0.42 percent, closing at 1,900.53.
- The Nasdaq gained 0.76 percent, closing at 4,185.81.
- Gold lost 0.17 percent, trading at $1,292.80 an ounce.
- Oil gained 0.63 percent, trading at $104.39 a barrel.
- Silver lost 0.49 percent, trading at $19.42 an ounce.
News of Note
April New Home Sales rose to 433,000 from 407,000 in March, topping the consensus of 420,000.
The Bank of Japan's Governor Haruhiko Kuroda said that he sees little reason for the yen to rise against other international currencies given his belief that the U.S. economy is recovering at a stronger pace than Japan.
Germany's first quarter GDP rose 0.8 percent on quarter after gaining 0.4 percent in the fourth quarter. On year, Germany's GDP has risen 2.5 percent.
The rating agency S&P upgraded Spain's credit rating to BBB from BBB- with a stable outlook. Meanwhile, the rating agency Fitch upgraded Greece's long term debt to B from B-
Analyst Upgrades and Downgrades of Note
Analysts at Jefferies maintained a Hold rating on Aerospostale (NYSE: ARO) with a price target lowered to $5 from a previous $6. Meanwhile, analysts at RBC Capital downgraded Aeropostale to Sector Perform from Outperform with a price target lowered to $6 from a previous $14. Shares plunged to new 52-week lows of $3.37 before closing the day at $3.41, down 24.56 percent.
Analysts at JPMorgan maintained an Overweight rating on Best Buy (NYSE: BBY) with a price target raised to $35 from a previous $34. Shares gained 3.01 percent, closing at $27.01.
Analysts at HSBC downgraded China Mobile (NYSE: CHL) to Underweight from Neutral. Shares lost 0.95 percent, closing at $48.96.
Analysts at Jefferies maintained a Buy rating on FMC Corp (NYSE: FMC) with a price target lowered to $88 from a previous $95. Shares lost 0.05 percent, closing at $75.74.
Analysts at Barclays upgraded FireEye (NASDAQ: FEYE) to Overweight from Equal-weight with a price target lowered to $40 from a previous $50. Shares gained 3.41 percent, closing at $33.39.
Analysts at Clarkson Capital downgraded Hess (NYSE: HES) to Market Perform from Outperform. Shares lost 0.48 percent, closing at $89.86.
Analysts at UBS maintained a Neutral rating on Hewlett-Packard (NYSE: HPQ) with a price target raised to $34 from a previous $32. Also, analysts at Credit Suisse maintained a Neutral rating on H-P with a $35 price target. Shares hit new 52-week highs of $34.09 before closing the day at $33.72.
Analysts at Craig-Hallum upgraded Hilton Worldwide (NYSE: HLT) to Buy from Hold. Shares gained 0.27 percent, closing at $22.05.
Analysts at Deutsche Bank maintained a Hold rating on ITT Educational (NYSE: ESI) with a price target lowered to $18 from a previous $30. Shares lost 7.95 percent, closing at $18.87.
Analysts at Stifel Nicolaus upgraded L Brands (NYSE: LB) to Buy from Hold. Shares gained 1.11 percent, closing at $57.32.
Analysts at JPMorgan maintained a Neutral rating on TJX Companies (NYSE: TJX) with a price target lowered to $63 from a previous $65. Shares lost 0.58 percent, closing at $55.15.
Analysts at Barclays maintained an Equal-weight rating on Workday (NASDAQ: WDAY) with a price target lowered to $83 from a previous $97. Shares gained 1.91 percent, closing at $78.30.
Equities-Specific News of Note
CVS Caremark (NYSE: CVS) is still negotiating to acquire Brazil based Drogarias Pacheco Sau Paulo after an initial $2 billion offer was rejected. Shares hit new 52-week highs of $77.41 before turning negative and closing the day at $77.12, down 0.12 percent.
Boeing (NYSE: BA) has agreed to purchase ETS Aviation, a British based provider of fuel-efficiency management and analytic software. shares gained 0.43 percent, closing at $132.41.
Reynolds American (NYSE: RAI) announced that it will expand a manufacturing facility in North Carolina as part of a plan to release its Vuse electronic cigarette brand this summer. Shares lost 0.14 percent, closing at $58.45.
Analysts at JPMorgan commented that Valeant Pharmaceuticals (NYSE: VRX) will need to raise its big for Allergan (NYSE: AGN) to $180 to $200 a share. The analysts further added that Valeant could structure a deal in that price range. Shares of Valeant gained 2.01 percent, closing at $133.46 while shares of Alergan gained 1.84 percent, closing at $166.92.
Disney (NYSE: DIS) announced it will release a standalone Star Wars film (directed by Gareth Edwards) which focuses on a single character on December 16, 2016. Shares gained 1.18 percent, closing at $83.32.
TIG Advisors filled a schedule 14A in support of Zale (NYSE: ZLC) shareholders opposing the sale of the company to Signet (NYSE: SIG). Shares of Zale lost 0.37 percent, closing at $21.75 while shares of Signet lost 0.33 percent, closing at $104.30.
Exxon Mobil (NYSE: XOM) expanded its relationship with Russia by signing a pact to team up with Rosneft to drill in the Arctic and Siberia regions. Shares lost 0.18 percent, closing at $101.32.
The Committee for Medicinal Products for Human Use of the European Medicines Agency reported a positive opinion on PTC Therapeutics (NASDAQ: PTCT) application for a conditional marketing authorization relating to its Ataluren muscular dystrophy treatment. Shares gained 1.26 percent, closing at $36.83.
Mastercard (NYSE: MA) and Visa (NYSE: V) announced they will both continue operating in Russia despite a new law that requires a much larger security deposit. Shares of MasterCard gained 0.92 percent, closing at $76.45 while shares of Visa gained 1.29 percent, closing at $212.07.
Winners of Note
According to Korean news sources, Samsung and LG may consider using sapphire cover glass for future phones. Shares of sapphire producer GT Advanced Technology (NASDAQ: GTAT) surged higher by 8.10 percent, closing at $15.95.
Decliners of Note
Shares of RetailMeNot (NASDAQ: SALE) continued to decline after Thursday's plunge. Analysts at Stifel noted that up to 20 percent of the site's Google traffic and ten percent of it's overall traffic has been affected by Google's algorithm search result changes. The analyst further added that it will take the company weeks to fully analyze data and attempt to reverse declining traffic. Analysts at Stifel Nicolaus downgraded RetailMeNot (NASDAQ: SALE) to Hold from Buy while removing a previous $42 price target. Shares hit new 52-week lows of $22.45 before closing the day at $23.87, down 5.39 percent.
Earnings of Note
This morning, Foot Locker (NYSE: FL) reported its first quarter results. The company announced an EPS of $1.11, beating the consensus estimate of $1.06. Revenue of $1.86 billion beat the consensus estimate of $1.79 billion. Net income for the quarter rose to $162 million from $138 million in the same quarter a year ago as comparable-store sales rose 7.6 percent. Foot Locker's gross margin rate improved 40 bps to 34.6 percent as the company's rate of selling, general, and administrative expenses improved to 19.0 percent from 19.2 percent last year. Shares gained 1.56 percent, closing at $48.92.
Quote of the Day
“These fallen heroes represent the character of a nation who has a long history of patriotism and honor – and a nation who has fought many battles to keep our country free from threats of terror.” – Michael N. Castle
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