Market Wrap For June 17: Markets Higher Ahead Of Fed Decision
U.S. stocks were slightly higher following encouraging economic May data coming in a day before the Federal Reserve concludes its two day meeting regarding its monetary policy.
It is possible the Federal Reserve will announce on Wednesday that it is lowering its monthly asset purchases to $35 billion. Investors will also pay attention to any commentary regarding interest rates following the Fed meeting.
An ongoing Senate panel led investors to believe that there will be little or no rule changes for brokerage firms.
- The Dow gained 0.16 percent, closing at 16,808.49.
- The S&P 500 gained 0.22 percent, closing at 1,941.99.
- The Nasdaq gained 0.37 percent, closing at 4,337.23.
- Gold lost 0.36 percent, trading at $1,270.70 an ounce.
- Oil lost 0.65 percent, trading at $106.21 a barrel.
- Silver lost 0.03 percent, trading at $19.71 an ounce.
News of Note
ICSC Retail Store Sales rose 0.4 percent week over week after declining 2.8 percent last week.
May Consumer Price Index rose 0.4 percent after rising 0.3 percent in April and exceeded estimates for a 0.2 percent gain.
May Core CPI rose 0.3 percent after rising 0.2 percent in April and exceeded estimates for a 0.2 percent gain.
May Housing Starts fell to 1.001K after gaining 1.071K in April and missing estimates for a gain of 1.034K.
Redbook Chain Store Sales rose 3.5 percent on week after growing 3.3 percent last week.
The International Monetary Fund lowered its 2014 economic growth forecast for the U.S. to 2.0 percent from 2.8 percent figure it previously projected in April. The IMF maintained its 3.0 percent growth forecast for 2015.
Argentina's President Cristina Fernandez said that the country cannot pay $1.5 billion owed to bond holders that consists mostly of hedge funds.
Analyst Upgrades & Downgrades of Note
Analysts at KeyBanc maintained a Buy rating on Big Lots (NYSE: BIG) with a price target raised to $53 from a previous $50. Shares hit new 52-week highs of $45.62 before closing the day at $45.29, up 2.12 percent.
Analysts at Benchmark downgraded Broadcom (NASDAQ: BRCM) to Hold from Buy. Shares lost 0.47 percent, closing at $38.48.
Analysts at Bank of America downgraded Domino's Pizza (NYSE: DPZ) to Underperform from Neutral with a price target lowered to $68 from a previous $77. Shares lost 1.63 percent, closing at $71.00.
Analysts at JPMorgan maintained a Neutral rating on Dow Chemical (NYSE: DOW) with a price target raised to $48 from a previous $45. Shares lost 0.57 percent, closing at $52.00.
Analysts at Susquehanna upgraded Expedia (NASDAQ: EXPE) to Positive from Neutral with a price target raised to $90 from a previous $79. Shares gained 4.08 percent, closing at $77.62.
Analysts at Macquarie initiated coverage of Gogo (NASDAQ: GOGO) with a Neutral rating and $21 price target. Shares gained 0.91 percent, closing at $18.92.
Analysts at Morgan Stanley assumed coverage of Netflix (NASDAQ: NFLX) with an Overweight rating and $500 price target. Shares gained 3.11 percent, closing at $443.65.
Analysts at Stifel Nicolaus upgraded Southwest Airlines (NYSE: LUV) to Buy from Hold with a $30 price target. Shares gained 2.03 percent, closing at $26.63.
Analysts at BMO Capital Markets downgraded The Travelers Companies (NYSE: TRV) to Market Perform from Outperform with a price target raised to $98 from a previous $96. Shares lost 0.25 percent, closing at $95.22.
Analysts at Citigroup maintained a Neutral rating on Wells Fargo (NYSE: WFC) with a price target raised to $56 from a previous $53. Shares gained 1.12 percent, closing at $51.66.
Analysts at Deutsche Bank upgraded Williams Companies (NYSE: WMB) to Buy from Hold with a price target raised to $67 from a previous $38. Shares gained 2.30 percent, closing at $57.31.
Analysts at CRT Capital maintained a Buy rating on Yahoo! (NASDAQ: YHOO) with a price target lowered to $41 from a previous $45. Meanwhile, analysts at Oppenheimer maintained an Outperform rating on Yahoo! with a price target lowered to $40 from a previous $43. Also, analysts at Raymond James maintained an Outperform rating on Yahoo! with a price target lowered to $40 from a previous $43. Shares lost 1.09 percent, closing at $34.43.
Analysts at Citigroup maintained a Neutral rating on Yum! Brands (NYSE: YUM) with a price target raised to $85 from a previous $75. Shares gained 0.49 percent, closing at $79.49.
Equities-Specific News of Note
The state of New Jersey passed a bill granting Tesla Motors (NASDAQ: TSLA) permission to sell vehicles directly to consumers. The bill is still required approval by the state Senate. Shares gained 3.14 percent, closing at $231.67.
eBay (NASDAQ: EBAY) announced that it's PayPal service will expand to ten new countries in Africa, Eastern Europe and Latin America. Shares gained 0.12 percent, closing at $49.06.
Amazon.com (NASDAQ: AMZN) announced that its smartphone which will be unveiled this week will be exclusive to AT&T (NYSE: T) subscribers. Shares of Amazon lost 0.61 percent, closing at $325.62 while shares of AT&T gained 0.11 percent, closing at $35.02.
Royal Dutch Shell (NYSE: RDS-A) announced that it plans to sell its 19 percent stake of its stake in Woodside Petroleum for $5.7 billion as part of a company plan to sell $15 billion in assets by the end of 2015. Shares lost 0.40 percent, closing at $80.45.
Facebook (NASDAQ: FB) launched Slingshot, an app that allows users to share photos and videos with groups of contacts. Shares gained 0.33 percent, closing at $64.40.
Target (NYSE: TGT) plans to issue five and ten-year notes and use the proceeds to retire $1 billion of higher-rate notes. Shares gained 0.74 percent, closing at $58.17.
Warren Buffet confirmed that he has no plans to take Coca-Cola (NYSE: KO) private. shares gained 0.46 percent, closing at $40.92.
Wal-Mart (NYSE: WMT) acquired Stylr, a mobile app that will be integrated with WalMartLabs. Shares lost 0.46 percent, closing at $74.99.
Cisco (NASDAQ: CSCO) announced that it will purchase Tail-f Systems, a provider of network orchestration software for $175 million in cash. Shares lost 0.12 percent, closing at $24.50.
Alcoa (NYSE: AA) will invest $25 million at its facility in Virginia to manufacture jet engine blades that are 20 percent lighter. Shares gained 0.91 percent, closing at $14.48.
BP (NYSE: BP) entered in to a $20 billion LNG supply deal with Chinese based Cnooc (NYSE: CEO) with a 20-year duration. Shares of BP lost 0.19 percent, closing at $51.64 while shares of Cnooc gained 0.86 percent, closing at $179.70.
Winners of Note
SolarCity (NASDAQ: SCTY) announced that it will acquire Silevo, a solar technology and manufacturing company that offers high performance solar modules. SolarCity plans to build a module plant in New York with a capacity of greater than 1GW. Shares gained 17.58 percent, closing at $64.53.
According to Bloomberg, Oracle is close to finalizing a deal to acquire Micros Systems (NASDAQ: MCRS) for approximately $5 billion. Shares of Micros gained 15.08 percent, closing at $66.41.
Global Eagle Entertainment (NYSE: ENT) announce that it entered in an agreement to offer aircraft satellite connectivity with Boeing to be installed on its planes. shares of Global Eagle Entertainment gained 11.48 percent, closing at $12.24.
Decliners of Note
Last night, Acorda Therapeutics (NASDAQ: ACOR) announced that it will offer $300 million of convertible senior notes due in 2021. The company plans to use the proceeds for general corporate purposes which may include investments in other businesses or products or an outright acquisition. Shares lost 8.96 percent, closing at $32.12.
Earnings of Note
After the market closed, Adobe Systems (NASDAQ: ADBE) reported its second quarter results. The company announced an EPS of $0.37, beating the consensus estimate of $0.30. Revenue of $1.07 billion beat the consensus estimate of $1.03 billion. Shares were trading higher by 5.57 percent at $71.30 following the earnings report.
Quote of the Day
“The empirical analysis suggests that market pressures were more subdued in countries with stronger fundamentals, deeper financial markets, better growth prospects, greater degree of financial integration, and a tighter stance toward capital flows and macroprudential policies prior to the tapering talks.” – International Monetary Fund Working Paper on Impact of Fed Tapering Announcements on Emerging Markets published on Tuesday.
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