Market Overview

Bulls Take A Break As Dow's Winning Streak Ends At 7 Days

U.S. stocks were slightly lower as positive housing data proved to be not enough to boost the Dow's winning streak to eight days.

The National Association of Realtors reported that previously-owned home sale posted strong growth in May compared to April.

U.S. Secretary of State John Kerry left Washington for Iraq to further talks with the ruling Iraqi government to counter the recent uprising in Sunni insurgency across key regions in the country.

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  • The Dow lost 0.06 percent, closing at 16,937.26.
  • The S&P 500 lost 0.01 percent, closing at 1,962.61.
  • The Nasdaq gained 0.01 percent, closing at 4,368.68.
  • Gold gained 0.13 percent, trading at $1,318.30 an ounce.
  • Oil lost 0.74 percent, trading at $106.04 a barrel.
  • Silver lost 0.28 percent, trading at $20.89 an ounce.

News of Note

May Chicago Fed National Activity Index rose to +0.21 from -0.15 in April.

June U.S. Manufacturing PMI rose to 57.5 from 56.4 in May. Output rose to 61 from 59.6, New Orders rose to 61.7 from 58.85 while Employment rose to 53.8 from 53.7.

May Existing Home Sales rose to 48.9 million from 4.66 million in April, topping estimates of 4.75 million.

The CBOE announced that trading on its volatility futures will now trade from Sunday at 6 PM ET until Friday at 4:15 PM ET. On weekdays, trading will pause for only a 15 minute break after 4:15.

HSBC China flash PMI for June rose to 50.8 from 49.4 in May, topping expectations of 49.7.

BNP Paribas is close to settling with U.S. authorities for $8 to $9 billion over alleged trading sanction violations with countries such as Iran and Sudan.

Analyst Upgrades and Downgrades of Note

Analysts at JPMorgan reinstated coverage of Actavis (NYSE: ACT) with an Overweight rating and $300 price target. Shares gained 2.06 percent, closing at $221.35.

Analysts at Pacific Crest downgraded Advanced Micro Devices (NYSE: AMD) to Underperform from Sector Perform. Shares lost 2.20 percent, closing at $4.01.

Analysts at Canaccord Genuity upgraded Barclays (NYSE: BCS) to Buy from Hold. Shares gained 0.56 percent, closing at $16.11.

Analysts at Deutsche Bank maintained a Buy rating on Big Lots (NYSE: BIG) with a price target raised to $49 from a previous $43. Shares hit new 52-week highs of $46.06 before closing the day at $45.31, up 0.53 percent.

Analysts at Evercore Partners upgraded BlackBerry (NASDAQ: BBRY) to Equal-weight from Underweight with a price target raised to $10 from a previous $6. Shares gained 3.16 percent, closing at $10.12.

Analysts at UBS maintained a Buy rating on Charter Communications (NASDAQ: CHTR) with a price target raised to $200 from a previous $148. Shares hit new 52-week highs of $154.63 before closing the day at $151.63, up 0.74 percent.

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Analysts at Wedbush downgraded coach (NYSE: COH) to Underperform from Neutral with a price target lowered to $26 from a previous $40. Shares hit new 52-week lows of $33.83 before closing the day at $34.02, down 2.04 percent.

Analysts at Citigroup upgraded DISH Network (NASDAQ: DISH) to Buy from Neutral. Shares gained 1.96 percent, closing at $62.49.

Analysts at Janney Capital upgraded Express (NASDAQ: EXPR) to Buy from Neutral. Shares gained 0.79 percent, closing at $16.67.

Analysts at JPMorgan maintained a Neutral rating on General Mills (NYSE: GIS) with a price target raised to $52 from a previous $50. Shares lost 0.70 percent, closing at $54.27.

Analysts at Credit Suisse maintained an Outperform rating on Halliburton Company (NYSE: HAL) with a price target raised to $79 from a previous $78. Shares hit new 52-week highs of $70.79 before closing the day at $70.37, up 0.19 percent.

Analysts at Longbow Research downgraded Joy Global (NYSE: JOY) to Underperform from Neutral with a $50 price target. Shares lost 2.04 percent, closing at $62.02.

Analysts at Goldman Sachs downgraded Nordstrom (NYSE: JWN) to Neutral from Buy with an unchanged price target of $74. Shares lost 0.53 percent, closing at $67.73.

Analysts at CRT Capital maintained a Buy rating on Shire (NASDAQ: SHPG) with a price target raised to $250 from a previous $195. Shares gained 2.02 percent, closing at $227.40.

Analysts at Barrington Research initiated coverage of Tiffany & Co (NYSE: TIF) with a Market Perform rating. Shares gained 0.22 percent, closing at $99.87.

Analysts at Deutsche Bank maintained a Buy rating on Wynn Resorts (NASDAQ: WYNN) with a price target lowered to $242 from a previous $265. Shares gained 0.18 percent, closing at $201.16.

Equities-Specific News of Note

Lululemon's (NASDAQ: LULU) founder and ex-CEO Chip Wilson has hired Goldman Sachs bankers to devise a strategy in increasing his control and influence at the company, which may include a proxy fight or finding a partner for a buyout. Shares gained 2.54 percent, closing at $41.25.

Allergan's (NYSE: AGN) board of directors unanimously rejected Valeant Pharmaceuticals (NYSE: VRX) offer which consisted of $72 in cash and 0.83 shares of Valeant. Allergan said that the deal undervalues the company and creates uncertainties for its shareholders. Shares of Allergan lost 0.30 percent, closing at $164.82 while shares of Valeant lost 0.59 percent, closing at $121.21.

Alstom's board of directors approved General Electrics' (NYSE: GE) takeover bid of $17 billion. As part of the deal, the French government purchased a 20 percent stake in Alstom from Bouygues. Shares of General Electric lost 1.08 percent, closing at $26.68.

FMC (NYSE: FMC) issued guidance for the second quarter and estimates it will earn $0.95 to $1.05 per share, below the consensus estimate of $1.11. For the full fiscal year, the company expects to earn $4.10 to $4.30 per share, below the consensus estimate of $4.44 and below prior guidance of $4.35 to $4.55 per share. Shares lost 4.88 percent, closing at $71.10.

Analysts at Sterne Agee estimated that Facebook (NASDAQ: FB) could see $30 billion in revenue by 2018. Shares gained 1.35 percent, closing at $65.37.

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Ford (NYSE: F) announced that it plans to have more than 800 dealer locations in China by the end of 2014, mostly in lower-tier cities. Shares gained 1.26 percent, closing at $16.88.

Oracle (NYSE: ORCL) has agreed to acquire Micros (NASDAQ: MCRS) for $5.3 billion, or $68 per share. The addition of Micros is expected to extend Oracle's offerings in its business applications, technologies and cloud portfolio. The deal is expected to close in the second half of 2014 and will be immediately accretive to Oracle's earnings. Shares of Oracle gained 0.69 percent, closing at $41.10 while shares of Micros gained 3.36 percent, closing at $67.98.

AbbVie (NYSE: ABBV) raised the mid-point of its full-year EPS guidance by $0.06 to a range of $3.06 to $3.16. Shares gained 0.84 percent, closing at $53.75.

American Apparel's (NYSE: APP) board of directors rejected an invitation to meet with the company's former CEO Dov Charney. Shares lost 2.47 percent, closing at $0.67.

J.C. Penney (NYSE: JCP) settled on a new $2.35 billion credit facility to replace an older credit facility which is set to due in April 2016. Shares lost 3.44 percent, closing at $8.69.

Winners of Note

According to Bloomberg, Monsanto (NYSE: MON) was considering a $40 billion takeover of its rival Syngenta (NYSE: SYT) in order to gain favorable tax status in Syngenta's native Switzerland. Shares of Monsanto hit new 52-week highs of $123.99 before closing the day at $122.10. Shares of Syngenta gained 7.0 percent, closing at $79.59.

Wisconsin Energy (NYSE: WEC) has agreed to acquire Integrys Energy (NYSE: TEG) for a total consideration of $71.47 per share, valuing the deal at $9.1 billion, representing a 17.3 percent premium to Integrys' closing price on Friday. A combined company will have a regulated rate base of $16.8 billion in 2015, serve more than 4.3 million total gas and electric customers across several mid-west states in addition to operating 71,000 miles of electric distribution lines and 44,000 miles of gas transmission and distribution lines. Shares of Wisconsin Energy lost 3.45 percent, closing at $45.27 while shares of Integrys Energy hit new 52-week highs of $70.61 before closing the day at $68.35, up 12.14 percent.

Analysts at Piper Jaffray said that Groupon's (NASDAQ: GRPN) number of deals is steadily growing as of the end of the first quarter. The analysts noted that Groupon had more than 200,000 active deals, up from 140,000 at the end of the fourth quarter. Shares gained 5.53 percent, closing at $6.49.

Decliners of Note

A Florida district court handed an unfavorable ruling to ParkerVision (NASDAQ: PRKR) in its IP suit against Qualcomm (NASDAQ: QCOM). A judge has approved Qualcomm's motion for a judgement as a matter of law and a motion of law. The suit was initiated in May after ParkerVision received a $173 million verdict against Qualcomm late last year. Shares of ParkerVision tumbled to new 52-week lows of $1.21 before closing the day at $1.85, down 63.07 percent. Shares of Qualcomm lost 0.54 percent, closing at $79.43.

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Altisource Residential (NYSE: RESI) has failed to win June's HUD auction of distressed loans. Altisource has previously won auctions with a bid lower than 77.6 percent of property values. Instead, a private equity firm Lone Star won the auction with a $3.9 billion, good for 65.8 percent of the unpaid loan balances. Shares lost 8.94 percent, closing the day at $25.96. Of note, Altisource Asset Management (NYSE: AAMC), a supplier of asset management services to Altisource Residential saw its shares tumble by 25.40 percent, closing at $819.90.

Earnings of Note

After the market closed, Micron Technology (NASDAQ: MU) reported its third quarter results. The company announced an EPS of $0.79, beating the consensus estimate of $0.70. Revenue of $3.98 billion beat the consensus estimate of $3.89 billion. Shares were trading lower by 0.99 percent at $30.95 following the earnings release.

Quote of the Day

“We're a little disappointed, but still optimistic. We thought we'd put one foot in the Round of 16, but we are where we'd aimed to be before the tournament: going into the final game with a good chance of progressing. The coaching staff put in place a great game plan. Portugal didn't cause us too many problems and we could have avoided both their goals. We moved the ball around better and had the clearer chances. We're not going to let the last-gasp goal get us down.” – Tim Howard, team USA's goalkeeper for its World Cup squad speaking after letting in a last-minute goal to draw Portugal 2-2 on Sunday.

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