Market Overview

Market Wrap For June 20: Yet Again, Dow And S&P 500 Indices Hit New Highs

U.S. stocks were slightly higher as the Dow and S&P 500 indices continue hitting new all-time highs following positive comments from the Fed's Chief Janet Yellen earlier this week.

The Dow continues to flirt with the 17,000 mark and hit a historical intra-day high of 16,978.0 Friday morning. Meanwhile, the S&P 500 index continues moving towards the 2,000 mark and traded as high as 1,963.91. On the other hand, the Nasdaq index still has some catching up to do to match its 52-week high of 4,371.71 set earlier this year.

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  • The Dow gained 0.15 percent, closing at 16,94714.
  • The S&P 500 gained 0.17 percent, closing at 1,962.87.
  • The Nasdaq gained 0.20 percent, closing at 4,368.04.
  • Gold gained 0.18 percent, trading at $1,316.50 an ounce.
  • Oil gained 0.58 percent, trading at $106.67 a barrel.
  • Silver gained 1.12 percent, trading at $20.88 an ounce.

News of Note

Atlanta Fed's June Business Inflation Expectations rose to +2 percent from 1.9 percent in May.

Canada's all-items consumer price index rose 2.3 percent in May, above expectations for a 2.0 percent rise.

Analyst Upgrades and Downgrades of Note

Analysts at Credit Suisse maintained an Outperform rating on AbbVie (NASDAQ: ABBV) with a price target raised to $60 from a previous $58. Shares hit new 52-week highs of $55.62 before turning negative and closing the day at $53.30, down 1.64 percent.

Analysts at Stephens & Co. initiated coverage of Aeropostale (NYSE: ARO) with an Equal-weight rating and $3.50 price target. Shares lost 4.0 percent, closing at $3.36.

Analysts at Stephens & Co. initiated coverage of American Eagle Outfitters (NYSE: AEO) with an Equal-weight rating and $12 price target. Shares gained 0.70 percent, closing at $11.58.

Analysts at Nomura maintained a Neutral rating on BlackBerry (NASDAQ: BBRY) with a price target lowered to $10 from a previous $9. Also, analysts at CIBC maintained a Sector Underperform rating on BlackBerry with a price target raised to $6.25 from a previous $5. Shares gained 7.81 percent, closing at $9.80.

Analysts at Macquarie maintained a Neutral rating on Charter Communications (NASDAQ: CHTR) with a price target raised to $155 from a previous $135. Shares hit new 52-week highs of $150.67 before closing the day at $150.51, up 1.52 percent.

Analysts at William Blair downgraded Coach (NYSE: COH) to Market Perform from Outperform. Also, analysts at BMO Capital Markets downgraded Coach to Market Perform from Outperform with a price target lowered to $30 from a previous $56. Meanwhile, analysts at Barclays maintained an Equal-weight rating on Coach with a price target lowered to $34 from a previous $45. Of note, analysts at JPMorgan maintained an Overweight rating on Coach with a price target lowered to $39 from a previous $49. Shares hit new 52-week lows of $34.31 before closing the day at $34.73, down 2.69 percent.

Analysts at Wells Fargo initiated coverage of Deckers Outdoor (NASDAQ: DECK) with an Outperform rating. Shares lost 0.74 percent, closing at $80.26.

Analyst at Barclays maintained an Equal-weight rating on FedEx (NYSE: FDX) with a price target raised to $150 from a previous $140. Shares gained 0.35 percent, closing at $148.12.

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Analysts at Drexel Hamilton initiated coverage of Halliburton (NYSE: HAL) with a Buy rating and $79 price target. Shares hit new 52-week highs of $70.62 before closing the day at $70.24, up 1.83 percent.

Analysts at UBS maintained a Buy rating on Intercontinental Exchange (NYSE: ICE) with a price target lowered to $235 from a previous $239. Shares lost 1.07 percent, closing at $194.86.

Analysts at UBS initiated coverage of Kinder Morgan (NYSE: KMI) with a Buy rating and $38 price target. Shares gained 1.78 percent, closing at $36.03.

Analysts at UBS upgraded Kinder Morgan Energy Partners (NYSE: KMP) to Buy from Neutral. Shares gained 0.19 percent, closing at $80.25.

Analysts at Goldman Sachs upgraded The Kroger Company (NYSE: KR) to Neutral from Sell with a price target raised to $52 from a previous $40. Meanwhile, analysts at UBS maintained a Neutral rating on Kroger with a price target raised to $53 from a previous $45. Also, analysts at JPMorgan maintained an Overweight rating on Kroger with a price target raised to $56 from a previous $53. Shares hit new 52-week highs of $50.20 before closing the day at $49.84, up 0.36 percent.

Analysts at JPMorgan maintained an Overweight rating on Michael Kors (NYSE: KORS) with a price target raised to $104 from a previous $100. Shares lost 0.85 percent, closing at $88.60.

Analysts at UBS maintained a Buy rating on Oracle (NYSE: ORCL) with a price target raised to $46 from a previous $42. Also, analysts at Citigroup downgraded Oracle to Neutral from Buy. Shares lost 3.98 percent, closing at $40.82.

Analysts at Wedbush downgraded PetSmart (NASDAQ: PETM) to Neutral from Outperform. Shares lost 2.25 percent, closing at $56.96.

Analysts at Deutsche Bank downgraded Pier 1 Imports (NYSE: PIR) to Hold from Buy with a price target lowered to $18 from a previous $24. Shares hit new 52-week lows of $15.00 before closing the day at $15.18, down 4.29 percent.

Analysts at Drexel Hamilton initiated coverage of Schlumberger (NYSE: SLB) with a Buy rating and $120 price target. Shares hit new 52-week highs of $109.75 before closing the day at $108.83, up 1.14 percent.

Equities-Specific News of Note

Merck (NYSE: MRK) began the process of acquiring Idenix Pharmaceuticals (NASDAQ: IDIX) shares for $24.50 by released a schedule TO with the SEC. Idenix will also release an SEC schedule in which the board of directors recommend that shareholders accept Merck's acquisition offer. Shares of Merck gained 1.06 percent, closing at $58.92 while shares of Idenix gained 0.08 percent, closing at $24.01.

According to the New York Post, Verizon (NYSE: VZ) is interested in buying Dish Network's (NASDAQ: DISH) spectrum. Shares of Verizon lost 0.16 percent, closing at $49.39 while shares of Dish gained 2.47 percent, closing at $61.29.

Last night, Carl Icahn wrote a letter to Family Dollar's (NYSE: FDO) Chairman and CEO Howard Levine demanding an immediate sale of the company. Icahn noted that a sale would create “massive synergies” and that consolidation in the sector is “inevitable.” Shares of Family Dollar gained 0.91 percent, closing at $68.76.

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Nike (NYSE: NKE) announced that Reenie Benziger will head its global apparel business. Previously, Benziger was VP of Global Young Athletes within Nike. Shares lost 0.71 percent, closing at $75.10.

Starbucks (NASDAQ: SBUX) is considering raising the price on some of its drinks and bagged coffee products. Shares lost 0.82 percent, closing at $76.60.

Freeport-McMoRan (NYSE: FCX) finalized the sale of its interests in Eagle Ford for $3.1 billion to a subsidiary of Encana (NYSE: ECA). Shares of Freeport-McMoRan gained 0.72 percent, closing at $34.86 while shares of Encana lost 0.28 percent, closing at $24.53.

Bank of America (NYSE: BAC) requested a meeting with U.S. Attorney General Eric Holder to discuss a settlement over allegedly defrauding mortgage bond investors prior to the 2008 financial crisis. Shares lost 0.58 percent, closing at $15.45.

Winners of Note

Shire (NASDAQ: SHPG) officially rejected AbbVie's proposed takeover bid of $78.87 a share. This is the third offer Shire turned down and claimed the recent offer price is still too low. Shire said in a press release that it projects its sales to more than double to $10 billion by 2020 and it is a leader in Rare Diseases and Specialty Markets. As such, “the proposal would deny Shire shareholders the full benefits of Shire's growth strategy.” Shares of hit new 52-week highs of $229.44 before closing the day at $222.89, up 16.26 percent.

This morning, CarMax (NYSE: KMX) reported its first quarter results. The company announced an EPS of $0.76, beating the consensus estimate of $0.67. Revenue of $3.75 billion beat the consensus estimate of $3.59 billion. Net earnings for the quarter grew to $169.7 million from $146.7 million in the same quarter a year ago as used vehicle sales rose 9.8 percent to 150,528, new vehicles sold rose 33.2 percent to 2,597 and wholesale vehicle sales grew 9.9 percent to 97,098. The company also reported that income from CarMax Auto Finance rose 8.7 percent to $94.6 million. The company noted that it hit an all-time record level of quarterly sales and earnings. Shares hit new 52-week highs of $53.68 before closing the day at $52.75, up 16.50 percent.

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Continuing the momentum following yesterday's quarterly results, BlackBerry (NASDAQ: BBRY) continued rising today. Helping the cause is positive commentary from Citron Research who said that BlackBerry's CEO John Chen is “one of the strongest and most credible leaders on Wall Street.” The usually short research firm raised its price target on BlackBerry to $20 from a previous $15. Shares gained 7.92 percent, closing at $9.81.

Decliners of Note

Targa Resources (NASDAQ: TRGP) confirmed that it was involved in preliminary discussions regarding a sale of itself to Energy Transfer Partners) but was unable to finalize any deal. Shares of Targa Resources lost 8.32 percent, closing at $138.09.

Owens Corning (NYSE: OC) lowered its 2014 guidance and expects its EBIT to be $416 million, down from a previous guidance of $500 million. The company noted that it saw weaker than expected roofing volumes which could be as much as 20 percent lower than the same period a year ago. Shares lost 6.03 percent, closing at $38.81

Earnings of Note

This morning, Darden Restaurants (NYSE: DRI) reported its fourth quarter results. The company announced an EPS of $0.84, missing the consensus estimate of $0.94. Revenue of $2.32 billion missed the consensus estimate of $2.33 billion. Net earnings for the quarter fell to $286.2 million from $411.9 million in the same quarter a year ago as the company saw weak traffic at several of its restaurant chains. Same-restaurant sales declined 3.5 percent at Olive Garden to $926 million and 5.6 percent at Red Lobster (classified under discontinued operations) to $664 million. Same-restaurant sales, however, did rise 2.4 percent at LongHorn Steakhouse and 2.0 percent at the Specialty Restaurant Group. Shares lost 3.92 percent, closing at $47.58.

Quote of the Day

"Our experience and competence in this arena should be obvious to all. However, we don't believe there is any time to waste and don't wish to wait until the next annual meeting. Therefore, if we cannot achieve this collaboratively, we intend to take this matter directly to shareholders by commencing a written consent solicitation within the next few weeks to remove all of the members of Family Dollar's board of directors and replace them with individuals that will have a shareholder mandate to sell the company." - Carl Icahn in a letter to Family Dollar's CEO and Chairman Howard Levine

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