Markets Little Changed Ahead Of The Federal Reserve's Policy Decision
U.S. stocks were little changed ahead of the Federal Reserve's policy announcement due out on Wednesday.
The Federal Reserve will conclude a two-day session, with the central bank likely to announce further cuts to its monthly asset purchases.
In economic news, June home sales declined in the month, while analysts were expecting home sales to rise.
- The Dow gained 0.13 percent, closing at 16,9823.59.
- The S&P 500 gained 0.03 percent, closing at 1,978.91.
- The NASDAQ lost 0.10 percent, closing at 4,444.91.
- Gold gained 0.14 percent, trading at $1,305.10 an ounce.
- Oil lost 0.38 percent, trading at $101.70 a barrel.
- Silver gained 0.12 percent, trading at $20.66 an ounce.
News Of Note
July U.S. PMI Services Index remained flat at 61 from June while coming in ahead of analyst expectations of 60.
June Pending Home Sales declined 1.1 percent to 102.7. Analysts were expecting pending home sales to rise 0.5 percent in June.
July Dallas Fed Manufacturing Outlook rose to 12.7 from 11.4 in June, exceeding analyst expectations of 12.0.
Argentina's delegation to discuss its debt obligations in New York returned back home on Friday without scheduling any additional meetings for this week. According to Reuters, the country will elect to default on its debt.
The U.S. government imposed preliminary anti-dumping tariffs ranging from 26 percent to 165 percent on Chinese and Taiwanese solar cell and module imports.
Analyst Upgrades And Downgrades Of Note
Analysts at UBS upgraded AbbVie (NYSE: ABBV) to Buy from Neutral with a price target raised to $67 from a previous $57. Shares gained 1.05 percent, closing at $53.74.
Analysts at CRT Capital maintained a Buy rating on American Airlines (NYSE: AAL) with a price target lowered to $48 from a previous $51. Shares lost 3.33 percent, closing at $40.29.
Analysts at Credit Suisse maintained an Outperform rating on Anadarko Petroleum (NYSE: APC) with a price target raised to $134 from a previous $122. Shares lost 1.43 percent, closing at $107.65.
Analysts at BNP Paribas upgraded Baidu (NASDAQ: BIDU) to Buy from Reduce with a $260 price target. Meanwhile, analysts at Macquarie maintained an Outperform rating on Baidu with a price target raised to $280 from a previous $250 while analysts at UBS maintained a Neutral rating on Baidu with a price target raised to $212 from a previous $182. Shares hit new 52-week highs of $229.60 before closing the day at $225.80, down 0.31 percent.
Analysts at Citigroup maintained a Buy rating on Chipotle Mexican Grill (NYSE: CMG) with a price target raised to $793 from a previous $648. Shares hit new 52-week highs of $678.96 before closing the day at $678.01, up 0.66 percent.
Analysts at Pacific Crest downgraded Cisco Systems (NASDAQ: CSCO) to Sector Perform from Outperform while removing a previous $26 price target. Shares lost 0.19 percent, closing at $25.92.
Analysts at Macquarie maintained an Outperform rating on Freeport-McMoRan (NYSE: FCX) with a price target raised to $45 from a previous $40. Shares gained 0.18 percent, closing at $38.06.
Analysts at Citigroup maintained a Buy rating on Harley-Davidson (NYSE: HOG) with a price target lowered to $77 from a previous $85. Shares lost 1.58 percent, closing at $62.94.
Analysts at Deutsche Bank maintained a Buy rating on Macy's (NYSE: M) with a price target lowered to $65 from a previous $68. Shares gained 0.21 percent, closing at $57.58.
Analysts at Mainfirst upgraded Merck & Company (NYSE: MRK) to Outperform from Underperform. Shares lost 0.31 percent, closing at $57.97.
Analysts at UBS downgraded Monster Beverage (NASDAQ: MNST) to Neutral from Buy with a price target lowered to $73 from a previous $80. Shares lost 3.00 percent, closing at $65.00.
Analysts at BMO Capital Markets downgraded Pfizer (NYSE: PFE) to Market Perform from Outperform with a price target lowered to $31 from a previous $34. Shares lost 0.30 percent, closing at $30.10.
Analysts at Barclays maintained an Overweight rating on Southwest Airlines (NYSE: LUV) with a price target raised to $34 from a previous $33. Meanwhile, analysts at CRT Capital maintained a Buy rating on Southwest Airlines with a price target raised to $41 from a previous $34. Shares lost 0.10 percent, closing at $29.21.
Analysts at Sandler O'Neill downgraded The Travelers Company (NYSE: TRV) to Hold from Buy. Shares lost 0.24 percent, closing at $91.88.
Analysts at Barclays maintained an Underweight rating on United Continental (NYSE: UAL) with a price target raised to $48 from a previous $46. Shares lost 0.49 percent, closing at $46.55.
Analysts at Citigroup maintained a Neutral rating on Yum! Brands (NYSE: YUM) with a price target lowered to $79 from a previous $85. Shares gained 0.16 percent, closing at $74.16.
Equities-Specific News Of Note
Apple (NASDAQ: AAPL) has acquired BookLamp, a startup that provides users with personalized book recommendations. Shares hit new 52-week highs of $99.24 before closing the day at $99.02, up 1.38 percent.
According to Bloomberg, GlaxoSmithKline (NYSE: GSK) has no plans to spin off its consumer healthcare business, contradicting a report by the Financial Times. Shares lost 0.85 percent, closing at $48.20.
Duke Energy (NYSE: DUK) has agreed to acquire North Carolina's Eastern Municipal Power Agency assets for $1.2 billion. Shares gained 1.60 percent, closing at $74.39.
Hilton Worldwide (NYSE: HLT) plans to invest $550 million to upgrade its technology platform, including creating new smartphone and tablet services. Shares lost 0.16 percent, closing at $25.24.
General Motors (NYSE: GM) plans to offer a wireless smartphone charging system in its 2014 Cadillac ATS model. Shares lost 0.48 percent, closing at $34.90.
Netflix (NASDAQ: NFLX) is in talks to acquire streaming rights for Seinfeld. Shares gained 0.66 percent, closing at $424.66.
Darden Restaurants (NYSE: DRI) completed its $2.1 billion sale of Red Lobster to Golden Gate Capital. Shares gained 0.58 percent, closing at $44.92.
Exxon Mobil (NYSE: XOM) announced that its LNP project in Papua New Guinnea is operating at full capacity. Shares gained 1.15 percent, closing at $104.37.
Tesla Motors (NASDAQ: TSLA) began delivering right-hand Model S vehicles in Hong Kong and announced the opening of two Supercharger stations in Hong Kong. Shares gained 0.56 percent, closing at $224.82.
Winners Of Note
Dollar Tree (NASDAQ: DLTR) has agreed to acquire Family Dollar (NYSE: FDO0 for $8.5 billion or $74.50 a share in a cash-and stock deal. Family Dollar shareholders will receive $59.60 in cash, and the remainder will come in the form of $14.90 in shares of Dollar Tree for each share they own. The deal has been unanimously approved by the boards of directors of both companies and is expected to close in early 2015. It is expected to create $300 million in annual run rate synergies by the end of the third year after the deal closes. Dollar Tree will finance the acquisition through existing cash, debt syndication and bond offerings. Family Dollar's CEO Howard Levine will be given a seat on the board of directors at Dollar Tree. Shares of Dollar Tree gained 1.20 percent, closing at $54.87 while shares of Family Dollar surged to new 52-week highs of $76.82 before closing the day at $75.74, up 24.86 percent.
Zillow (NASDAQ: Z) has agreed to acquire Trulia (NYSE: TRLA) for $3.5 billion in stock. Trulia shareholders will receive 0.444 shares of Zillow for each share of Trulia owned. Zillow plans to create a “real estate media company” with a portfolio of online real estate assets while Trulia's brand will continue to operate independently. Zillow and Trulia believe the deal will result in at least $100 million in cost savings by 2015 because of better data-sharing, common ad services and a broader listing distribution. Shares of Zillow hit new 52-week highs of $164.90 before closing the day at $160.32, up 0.92 percent. Shares of Trulia hit new 52-week highs of $67.50 before closing the day at $65.04, up 15.42 percent.
Decliners Of Note
Horizon Pharma (NASDAQ: HZNP) disclosed that both CVS Caremark and Express Scripts will be dropping Duexis and Vimovo from their inventories and placed on an exclusion list as of January 1. Despite the loss, Hirozon Pharma disclosed that this will not impact its financial guidance of $270 million to $280 million in revenues and $80 million to $90 million. The company will update its 2015 guidance when it reports its fourth quarter results. Shares lost 34.17 percent, closing at $9.15.
Pozen (NASDAQ: POZN) receives a 10 percent royalty on Vimovo sales saw its shares lose 11.83 percent, closing at $6.93.
Earnings Of Note
This morning, Tyson Foods (NYSE: TSN) reported its third quarter results. The company announced an EPS of $0.75, missing the consensus estimate of $0.78. Revenue of $9.68 billion beat the consensus estimate of $9.47 billion. Net income for the quarter rose to $260 million from $249 million in the same quarter a year ago as the company benefited from a 2.2 percent gain in volume and 8.5 percent rise in average prices in the quarter. The company noted that its chicken segment could have “performed better” if it was not impacted by “isolated issues” at several plants. The Pork segment had a “record third quarter” despite tight hog supplies because of the PED virus, while the Prepared Foods segment had a “disappointing” quarter because of higher input costs. The company announced it plans to close three plants in addition to selling its operations in Brazil and Mexico for $575 million to partially pay for the recent acquisition of Hilshire Brands. Tyson Foods expects its fiscal 2014 domestic protein production to increase around one percent from 2014 levels. Shares gained 2.58 percent, closing at $40.56.
This morning, Cummins (NYSE: CMI) reported its second quarter results. The company announced an EPS of $2.43, beating the consensus estimate of $2.39. Revenue of $4.80 billion missed the consensus estimate of $4.82 billion. Net income for the quarter rose to $446 million from $414 million in the same quarter a year ago as an improving economy translated to a market share gain in medium duty trucks and buses. North American revenue rose 14 percent from a year ago, while International sales fell one percent as lower sales in Mexico, Brazil and India offset stronger demand in China. The company's EBIT rose to $657 million (13.6 percent of sales) from $621 million a year ago. The company expects its full-year EBIT to be in a range of 12.75 percent to 13.25 percent of sales, as the company also guided for its full-year sales to grow between eight percent and 11 percent. Cummins also noted that it expects its Chinese sales to rise only 10 percent this year after previously projected a 15 percent increase. Shares lost 3.20 percent, closing at $145.35.
Quote Of The Day
“I don't have any offers on my desk. If people would like to talk, I mean, talk is not an offer... I am comfortable with where the company is today, how we managed our technology, our businesses, the margins, the distribution channel or the new products that's coming out ... Whether it's going to be good enough to be iconic again, OK, that's something I need to chew on." - BlackBerry CEO John Chen discussing if there are any buyout offers on the table and the general state of business.
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