Market Overview

Market Wrap For June 19: Stocks Little Changed, Gold and Silver Higher

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U.S. stocks were little changed the day after investors and traders were reassured by the Federal Reserve that interest rates will not rise in the near-term.

The U.S. government reported that fewer Americans filed claims for jobless benefits in the previous week, partly helping the S&P 500 index close at a new historical all-time highs.

U.S. President Obama said that U.S. troops will return to Iraq in an advisory role, however, the President hinted that the U.S. is prepared for military action, if necessary.

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  • The Dow gained 0.09 percent, closing at 16,921.46.
  • The S&P 500 gained 0.13 percent, closing at 1,959.48.
  • The Nasdaq lost 0.08 percent, closing at 4,359.33.
  • Gold gained 3.55 percent, trading at $1,317.90 an ounce.
  • Oil gained 0.48 percent, trading at $106.10 a barrel.
  • Silver gained 4.91 percent, trading at $20.75 an ounce.

News of Note

EIA Natural Gas Inventory rose 113 bcf after rising 107 bcf last week. Analysts were expecting a rise of 109 bcf this week.

June Philly Fed Business Outlook rose to 17.8 from 15.4 in May, topping expectations of 14.0.

May Leading Indicators rose 0.5 percent to 101.7 after rising 0.3 percent in April. However, analysts were expecting a rise of 0.6 percent in May.

Initial Jobless Claims declined to 312,000 from 317,000 a week ago and coming in below the consensus of 313,000. Continuous claims declined 54,000 to 2.56 million.

The House Republicans named Kevin McCarthy as Majority Leader.

The British Pound traded above $1.70 U.S. for the first time since late 2008.

Analyst Upgrades and Downgrades of Note

Analysts at FBR Capital maintained an Outperform rating on Abercrombie & Fitch (NYSE: ANF) with a price target raised to $49 from a previous $43. Shares lost 0.70 percent, closing at $42.60.

Analysts at Credit Suisse maintained a Neutral rating on Air Products And Chemicals (NYSE: APD) with a price target raised to $140 from a previous $118. Shares lost 0.78 percent, closing at $192.70.

Analysts at Argus Research maintained an Outperform rating on Anadarko Petroleum (NYSE: APC) with a price target raised to $120 from a previous $115. Shares hit new 52-week highs of $110.28 before closing the day at $110.22, up 0.58 percent.

Analysts at JPMorgan maintained an Overweight rating on Bank of America (NYSE: BAC) with a price target lowered to $17 from a previous $17.50. Shares lost 0.64 percent, closing at $15.55.

Analysts at Credit Suisse maintained an Outperform rating on Celgene (NASDAQ: CELG) with a price target raised to $225 from a previous $210. Shares gained 4.43 percent, closing at $168.20.

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Analysts at Buckingham Research initiated coverage of Cisco Systems (NASDAQ: CSCO) with a Neutral rating and $27 price target. Shares gained 0.32 percent, closing at $24.71.

Analysts at Bank of America downgraded ConAgra Foods (NYSE: CAG) to Underperform from Buy with a $30 price target. Meanwhile, analysts at Citigroup maintained a Buy rating on ConAgra Foods with a price target lowered to $35 from a previous $36. Shares lost 3.58 percent, closing at $29.38.

Analysts at Global Hunter initiated coverage of Deere & Company (NYSE: DE) with a Neutral rating and $90 price target. Shares gained 0.43 percent, closing at $91.58.

Analysts at KLR Group downgraded EOG Resources (NYSE: EOG) to Accumulate from Buy. Shares hit new 52-week highs of $115.85 before closing the day at $115.80, up 1.99 percent.

Analysts at RBC Capital Markets upgraded FedEx (NYSE: FDX) to Sector Perform from Underperform with a price target raised to $155 from a previous $125. Meanwhile, analysts at Macquarie maintained an Outperform rating on FedEx with a price target raised to $160 from a previous $153. Also, analysts at Oppenheimer maintained an Outperform rating on FedEx with a price target raised to $161 from a previous $157. Shares lost 0.91 percent, closing at $147.60.

Analysts at Credit Suisse maintained a Neutral rating on J.M. Smucker Company (NYSE: SJM) with a price target raised to $111 from a previous $108. Shares lost 0.03 percent, closing at $106.60.

Analysts at Citigroup maintained a Sell rating on Jabil Circuit (NYSE: JBL) with a price target raised to $16.50 from a previous $15. Taking the opposite side, analysts at UBS maintained a Buy rating on Jabil Circuit with a price target raised to $23 from a previous $22. Shares gained 2.64 percent, closing at $20.63.

Analysts at BTIG Research initiated coverage of Keurig Green Mountain (NASDAQ: GMCR) with a Neutral rating. Shares lost 3.59 percent, closing at $121.56.

Analysts at BB&T Capital upgraded La-Z-Boy (NYSE: LZB) to Buy from Hold with a $27 price target. Shares gained 2.93 percent, closing at $23.51.

Analysts at Raymond James maintained a Strong Buy rating on Micron Technology (NASDAQ: MU) with a price target raised to $40 from a previous $30. Shares lost 0.78 percent, closing at $31.81.

Analysts at BTIG Research initiated coverage of Monster Beverage (NASDAQ: MNST) with a Buy rating and $90 price target. Shares gained 1.92 percent, closing at $72.75.

Analysts at UBS upgraded Starbucks (NASDAQ: SBUX) to Buy from Neutral. Shares gained 2.21 percent, closing at $77.23.

Equities-Specific News of Note

A group of car owners are suing General Motors (NYSE: GM) to recover the lost resale value of their cars due to General Motors' ignition switch recall fiasco. Shares gained 0.19 percent, closing at $36.37.

Celgene (NASDAQ: CELG) shareholders approved a 2 for 1 stock split with a distribution date of June 25. Shares gained 4.49 percent, closing at $168.31.

Harley-Davidson (NYSE: HOG) said that it has developed an electric motorcycle that will be for sale after the company finishes promoting it across the U.S. Shares gained 0.33 percent, closing at $70.14.

Skechers (NYSE: SKX) initiated a lawsuit against Adidas claiming that Reebok's Walk Ahead products are a violation of Skechers' patents. Shares lost 1.85 percent, closing at $45.13.

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General Electric (NYSE: GE) proposed created three joint ventures between itself and France based Alstom in the grid, nuclear and renewable category. Shares gained 0.97 percent, closing at $26.93.

Exxon Mobil (NYSE: XOM) began construction on a new chemical plant in Texas to produce high performance premium plastics such as ethylene. Shares lost 0.10 percent, closing at $102.63.

Starwood Hotels & Resorts (NYSE: HOT) said that it plans to double the number of luxury hotels that it operates in China over the next two years. Shares gained 0.71 percent, closing at $81.19.

Timken (NYSE: TKR) raised its EPS guidance for the full fiscal year to $0.15 and will continue paying a $0.25 a share dividend in the third quarter. Shares hit new 52-week highs of $69.25 before closing the day at $68.67, up 3.14 percent.

Twitter (NYSE: TWTR) acquired SnappyTV, a provider of tools that allow corporations to edit live content to be used on social media. Shares gained 0.41 percent, closing at $38.90.

United Technologies (NYSE: UTX) reaffirmed its full year fiscal 2014 EPS guidance of $6.65 to $6.85. Shares gained 0.30 percent, closing at $117.58.

Winners of Note

This morning, BlackBerry (NASDAQ: BBRY) reported its first quarter results. The company announced an EPS of -$0.11, beating the consensus estimate of -$0.26. Revenue of $966 million beat the consensus estimate of $963.17 million. Net income for the quarter rose to $23 million from a net loss of $84 million in the same quarter a year ago as the company recognized hardware revenue on approximately 1.6 million smartphones compared to 1.3 million smartphones in the previous quarter. In total, the company sold 2.6 million smartphones, including the recently launched Z3 device in Indonesia. BlackBerry's gross margin improved 500 basis points from the previous quarter to 48 percent while cash on hand rose to $3.1 billion from $2.7 billion, a figure which includes the sale of real estate. Excluding real-estate revenue and other one time items, BlackBerry burned through $255 million in cash, an improvement from the $784 million the company burned through in the previous quarter. Management guided the company to be break-even cash flow by the end of fiscal 2015. Shares gained 9.65 percent, closing at $9.09.

This morning, Kroger (NYSE: KR) reported its first quarter results. The company announced an EPS of $1.09, beating the consensus estimate of $1.05. Revenue of $32.96 billion beat the consensus estimate of $32.59 billion. Net earnings for the quarter rose to $557 million from $481 million in the same quarter a year ago as the company saw a 4.6 percent growth in supermarket sales, partly due to its acquisition of Harris Teeter. Kroger raised its full-year EPS guidance to a range of $3.19 to $3.27. Previously, the grocer guided to an EPS of $3.14 to $3.24. The company also said that it expects identical supermarket growth to be three percent to four percent for the fiscal year. Shares hit new 52-week highs of $50.20 before closing the day at $49.66, up 5.06 percent.

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After pricing its IPO at $24, shares of Markit (NASDAQ: MRKT) began trading at $26.15 and traded as high as $27.40 before closing the day at $26.70, up 11.25 percent.

Cieco (NYSE: CNL) has hired bankers from Goldman Sachs to advice the company to sell itself after receiving a bid from Canadian-based Borealis Infrastructure. The board of directors will explore its options and launch the process of selling itself. Shares hit new 52-week highs of $56.37 before closing the day at $55.98, up 5.96 percent.

Decliners of Note

This morning, KBR (NYSE: KBR) reported its first quarter results. The company announced an EPS of -$0.29, missing the consensus estimate of $0.37. Revenue of $1.63 billion missed the consensus estimate of $1.77 billion. Net income for the quarter fell to $43 million from $88 million in the same quarter a year ago due to losses by its pipe fabrication and module assembly facility in Canada. Gas monetization revenue fell to $400 million, a decrease of 33 percent due to a reduction in volume from gas-to-liquid projects in Nigeria and a gas project in Algeria. Finally, the company said that it began a strategic review of its business and will not release any guidance until it completes a review. Shares lost 7.07 percent, closing at $24.46.

Nokia (NYSE: NOK) shares were trading lower after the stock began trading ex-dividend following a $0.51 per share dividend payment scheduled for July 9. Separately, Nokia unveiled an Android home-screen replacement app named Z Launcher. According to TechCrunch, Nokia “epically trolled Microsoft by making an Android launcher.” Shares lost 6.24 percent, closing at $7.81.

During an investor day presentation, Coach's (NYSE: COH) management said that its revenue could decline at a low double-digit rate for fiscal 2015 while comp growth in North America is falling from a high-teens percentage rate. Management also said that major changes are required to remain competitive. Shares fell to new 52-week lows of $35.00 before closing the day at $35.69, down 8.93 percent.

Earnings of Note

This morning, Rite Aid (NYSE: RAD) reported its first quarter results. The company announced an EPS of $0.04, in-line with the consensus estimate. Revenue of $6.46 billion beat the consensus estimate of $6.43 billion. Net income for the quarter fell to $41.1 million from $89.7 million in the same quarter a year ago due to lower reimbursement rates that were not offset with reductions in generic costs. Front-end sales were unchanged during the quarter but pharmacy same-store sales rose 4.3 percent. The company reiterated previous guidance for fiscal 2015 and sees its total revenue to be in a range of $26.0 billion to $26.5 billion and same-store-sales rising 2.50 percent to 4.50 percent over fiscal 2014. Shares lost 3.49 percent, closing at $7.18.

After the market closed, Oracle (NYSE: ORCL) reported its fourth quarter results. The company announced an EPS of $0.92, missing the consensus estimate of $0.95. Revenue of $11.32 billion missed the consensus estimate of $11.48 billion. Shares were trading lower by 5.65 percent at $40.11 following the earnings report.

Quote of the Day

"So to summarize, all areas of our business are looking -- making very good progress. Financial objectives are on track and strategies are on track, and bottom-line we feel good about where we are and what it will take to get BlackBerry back to cash flow breakeven at the end of FY ‘15 fiscal -- our fiscal year ‘15 and to profitability sometime in the fiscal year ‘16." - BlackBerry (NASDAQ: BBRY) CEO John Chen speaking during the company's first quarter conference call.

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