Market Overview

Markets Marginally Higher On Light Volume And Encouraging Geopolitical Developments

Markets Marginally Higher On Light Volume And Encouraging Geopolitical Developments
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U.S. markets managed to squeeze out small gains in lighter than normal volume, as geopolitical tensions may be calming down.

Russia President Vladimir Putin said that the country will coordinate with the International Red Cross to send humanitarian aid to Ukraine. Meanwhile, Palestinians and Israel both agreed to an Egyptian-backed 72-hour ceasefire.

On the home front, the Vice Chairman of the Federal Reserve, Stanley Fischer, said that the United State's and global economies' recovery has been disappointing thus far. Some investors may conclude that Fischer's comments are proof the Fed may not tighten its monetary policy in the short term.

Looking ahead for the week, New York Fed President William Dudley and Boston Fed President Eric Rosengren will speak on Wednesday.

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  • The Dow gained 0.10 percent, closing at 16,569.98.
  • The S&P 500 gained 0.28 percent, closing at 1,936.92.
  • The NASDAQ gained 0.70 percent, closing at 4,401.33.
  • Gold lost 0.05 percent, trading at $1,310.40 an ounce.
  • Oil gained 0.40 percent, trading at $98.04 a barrel.
  • Silver gained 0.57 percent, trading at $20.06.

News Of Note

India's government announced it will begin to divest $10 billion of state-run companies with a 5 percent stake in the Steel Authority of India, the country's largest steel group by total volume.

Analyst Upgrades And Downgrades Of Note

Analysts at Jefferies maintained a Hold rating on Bristol-Myers Squibb (NYSE: BMY) with a price target raised to $45 from a previous $43. Shares lost 0.20 percent, closing at $49.09.

Analysts at Citigroup maintained a Neutral rating on CF Industries (NYSE: CF) with a price target lowered to $256 from a previous $262. Analysts at Barclays also maintained an Equal-Weight rating on CF Industries with a price target raised to $271 from a previous $269. Shares gained 0.03 percent, closing at $246.95.

Analysts at Citigroup maintained a Sell rating on Cisco Systems (NASDAQ: CSCO) with a price target raised to $20.50 from a previous $18. Shares gained 0.80 percent, closing at $25.23.

Analysts at Barclays maintained an Overweight rating on Deere & Company (NYSE: DE) with a price target lowered to $97 from a previous $101. Shares gained 0.21 percent, closing at $87.16.

Analysts at UBS maintained a Buy rating on Duke Energy (NYSE: DUK) with a price target lowered to $77 from a previous $80. Shares lost 0.24 percent, closing at $71.58.

Analysts at Jefferies maintained a Hold rating on Eli Lilly (NYSE: LLY) with a price target lowered to $61 from a previous $65. Shares gained 0.16 percent, closing at $61.08.

Analysts at Argus Research upgraded Freeport-McMoRan (NYSE: FCX) to Buy from Hold. Shares gained 1.12 percent, closing at $36.90.

Analysts at Craig-Hallum upgraded J.C. Penney (NYSE: JCP) to Hold from Sell with a $10 price target. Shares gained 2.35 percent, closing at $9.59.

Analysts at Pacific Crest downgraded King Digital Media (NYSE: KING) to Sector Perform from Outperform. Shares lost 5.81 percent, closing at $18.17.

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Analysts at Wedbush upgraded Krispy Kreme (NYSE: KKD) to Outperform from Neutral with a price target raised to $24 from a previous $18. Shares gained 8.49 percent, closing at $16.86.

Analysts at Deutsche Bank maintained a Buy rating on McDonald's (NYSE: MCD) with a price target lowered to $98 from a previous $105. Shares lost 0.02 percent, closing at $93.53.

Analysts at Jefferies maintained a Hold rating on Merck & Company (NYSE: MRK) with a price target lowered to $60 from a previous $63. Shares gained 0.19 percent, closing at $56.66.

Analysts at UBS upgraded PepsiCo (NYSE: PEP) to Buy from Neutral. Shares gained 1.66 percent, closing at $91.79.

Analysts at TH Capital downgraded Sina (NASDAQ: SINA) to Hold from Buy while removing a previous $75 price target. Shares gained 1.41 percent, closing at $48.23.

Analysts at Citigroup maintained a Buy rating on Sotheby's (NYSE: BID) with a price target lowered to $47 from a previous $55. Shares gained 0.27 percent, closing at $37.59.

Analysts at Deutsche Bank upgraded Tesla Motors (NASDAQ: TSLA) to Buy from Hold with a price target raised to $310 from a previous $220. Shares gained 4.51 percent, closing at $259.32.

Analysts at Credit Suisse maintained a Neutral rating on Tetra Technologies (NYSE: TTI) with a price target lowered to $13 from a previous $14. Shares gained 0.09 percent, closing at $11.12.

Analysts at Jefferies downgraded Wal-Mart Stores (NYSE: WMT) to Hold from Buy with a price target lowered to $76 from a previous $89. Shares lost 0.42 percent, closing at $74.36.

Equities-Specific News Of Note

MannKind (NASDAQ: MNKD) will receive a $150 million upfront payment from Sanofi (NYSE: SNY) following a worldwide licensing agreement between the two companies to develop and market an inhaled insulin therapy known as Afrezza. MannKind also stands to receive milestone payments of up to $775 million. The two companies also agreed to share the worldwide profits with Sanofi retaining 65 percent and MannKind receiving 35 percent. The two companies will launch the drug in the U.S. in the first quarter of 2015.

Shares of MannKind gained 4.92 percent, closing at $8.53, while shares of Sanofi lost 0.44 percent, closing at $52.09.

ConAgra Foods' (NYSE: CAG) CEO Gary Rodkin announced he will retire from the company next May. Shares gained 1.52 percent, closing at $31.43.

According to CNBC, ValueAct holds a $1 billion stake in 21st Century Fox (NASDAQ: FOXA). Shares gained 1.16 percent, closing at $34.77.

Rice Energy (NYSE: RICE) announced it will fire for the formation of a midstream MLP through an initial public offering to occur in the first half of 2015. Shares gained 2.80 percent, closing at $27.52.

IBM (NYSE: IBM) acquired Lighthouse Security, a provider of identity and access management software for cloud-based apps for an undisclosed sum.

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The European Commission approved Regeneron Pharmaceuticals' (NASDAQ: REGN) Eylea for the treatment of visual impairment caused by diabetic macular edema. Shares gained 0.14 percent, closing at $338.81.

Winners Of Note

Kinder Morgan (NYSE: KMI) announced that it will consolidate all of the Kinder companies, which will create the largest energy infrastructure company in North America. The consolidation of all the companies under one umbrella is expected to lower the company's tax bill by $20 billion over 14 years.

Shares of Kinder Morgan hit new 52-week highs of $42.49 before closing the day at $39.37, up 9.00 percent.

Shares of Kinder Morgan Partners (NYSE: KMP) hit new 52-week highs of $98.67 before closing the day at $94.12. Shares of Kinder Morgan Management (NYSE: KMR) hit new 52-week highs of $99.77 before closing the day at $95.42, up 23.89 percent. Shares of El Paso Partners (NYSE: EPB) gained 20.71 percent, closing at $40.56.

According to Bloomberg, Chiquita Brands (NYSE: CQB) received an acquisition offer of $13 per share from Cutarle Group and Safra Group. The report was later confirmed by Cutarle Group and Safra Group and set a deadline of noon eastern on Friday for Chiquita to accept the offer. Shares surged 30.22 percent, closing at $13.10.

Mattress Firm Holding (NASDAQ: MFRM) reported on Monday preliminary net sales and adjusted earnings per share for the second quarter. Mattress Firm saw its sales in the second quarter rise by 35 percent from a year ago to $410 million while comp sales have risen 28.8 percent. Earnings per share is expected to be in a range of $0.58 to $0.61, an improvement from the $0.43 per share the company earned a year ago. At the same time, the company raised its full-year fiscal guidance. The company raised its net sales guidance to $1.545 billion to $1.585 billion from $1.50 billion to $1.56 billion. Earnings per share is expected to be $1.59 to $1.65, up from a prior guidance of $1.53 to $1.61. Shares hit new 52-week highs of $56.65 before closing the day at $54.53, up 13.58 percent.

GT Advanced Technologies (NASDAQ: GTAT) announced that its Merlin solar module metallization and interconnect tech has now met industry standards. The company announced that it is now in active discussions with customers to bring its Merlin solar module to the market as early as 2015. The company estimates Merlin could generate $400 million to $1 billion in annual revenue by 2018 based on an estimated market share of 8 percent to 20 percent. Shares gained 5.29 percent, closing at $16.31.

Decliners Of Note

Monday morning, Gogo (NASDAQ: GOGO) reported its second quarter results.

The company announced an EPS of -$0.22, beating the consensus estimate of -$0.23. Revenue of $99.50 million missed the consensus estimate of $99.60 million. Net loss for the quarter improved to a loss of $18.7 million from a net loss of $72.6 million in the same quarter a year ago, as the company saw revenue gains in its major categories. Service revenue rose 28 percent from a year ago to $79.2 million, while equipment revenue rose 17 percent to $20.4 million from a year ago. North American commercial aviation revenue improved 25 percent from a year ago to $62.1 million with the average revenue per aircraft improving 18 percent to $9,994. Business aviation revenue rose 26 percent from a year ago to $37.1 million. Gogo reiterated prior guidance for its full-year revenue to be $400 million to $422 million, but the company expects its full-year adjusted EBITDA to be toward the low end of its $8 million to $18 million guidance range due to higher spending to obtain certificates for international services. Shares lost 4.57 percent, closing at $15.24.

Earnings Of Note

Dean Foods Company (NYSE: DF) reported its second quarter results.

The company announced an EPS of -$0.14, missing the consensus estimate of -$0.05. Revenue of $2.40 billion beat the consensus estimate of $2.32 billion. Operating loss for the quarter fell to $4 million from an operating income of $44 million a year ago, as unadjusted fluid milk volumes declined by 4 percent on a year-over-year basis despite a gain in market share to 35.9 percent from 35.7 percent in the previous quarter. Dean Foods referred to its second quarter as being “by far the most difficult operating environment in the history of the company.” The company lowered its third quarter EPS guidance to a range of -$0.05 to -$0.15 and will no longer issue guidance beyond the coming quarter. The company also noted there is an “uncertainty surrounding whether or when” the dairy commodity market will improve. Shares lost 3.86 percent, closing at $15.20.

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Priceline Group (NASDAQ: PCLN) reported its second quarter results. The company announced an EPS of $12.51, beating the consensus estimate of $12.04. Revenue of $2.10 billion missed the consensus estimate of $2.15 billion. Net income for the quarter rose to $576 million from $437 million in the same quarter a year ago, as bookings in the quarter rose 34 percent to $13.5 billion and its global accommodation business booked 90 million rooms, an improvement of 29 percent from a year ago. Priceline is aiming for a non-GAAP net income per share in the third quarter to be between $19.60 and $21.10, while revenue is expected to be 15 percent to 25 percent higher than it was a year ago. Finally, the company expects its year-over year gross profit to be 21 percent to 31 percent higher than it was a year ago. Shares gained 2.16 percent, closing at $1,309.28.

After the market closed, Caesars Entertainment (NASDAQ: CZR) reported its second quarter results. The company announced an EPS of -$3.24, missing the consensus estimate of -$1.19. Revenue of $2.19 billion missed the consensus estimate of $2.22 billion. Shares were trading lower by 1.61 percent at $13.45 following the earnings release.

After the market closed, Rackspace Hosting (NYSE: RAX) reported its second quarter results. The company announced an EPS of $0.16, in-line with the consensus estimate. Revenue of $441.10 million beat the consensus estimate of $436.91 million. Shares were trading lower by 0.99 percent at $31.00 following the earnings release.

Quote Of The Day

"The secret of getting ahead is getting started." - Mark Twain.

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