Market Overview

Markets Higher In Another Quiet Session Ahead Of Expiration Of Ceasefire Between Israel And Hamas

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U.S. stocks rose for the third time in four days bringing the Dow back into positive territory for the year.

Investors appeared to brush up poor retail sales from Macy's while focusing on business inventories that rose in June.

On the international front, Ukraine said it would not allow Russia's humanitarian aid convey to cross into its territory. In Iraq, 130 military advisers arrived in Irbil, including special operations forces to asses the humanitarian situation. U.S. Secretary of Defense Chuck Hagel previously stated that U.S. personal are not returning to the country with a "combat boots-on-the-ground operations."

Meanwhile, a 72-hour ceasefire between Israel and Gaza approaches its end with no sign of a longer ceasefire being implemented.

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  • The Dow gained 0.55 percent, closing at 16,651.80.
  • The S&P 500 gained 0.67 percent, closing at 1,946.72.
  • The NASDAQ gained 1.02 percent, closing at 4,434.13.
  • Gold gained 0.18 percent, trading at $1,312.90 an ounce.
  • Oil gained 0.04 percent, trading at $97.41 a barrel.
  • Silver lost 0.30 percent, trading at $19.84 an ounce.

News Of Note

MBA Mortgage Composite Indexdeclined 2.7 percent after rising 1.6 percent last week.

MBA Mortgage Purchase Index declined one percent, matching last week's decline.

MBA Mortgage Refinance Index declined four percent after rising four percent last week.

July Retail Sales remained flat at $439.8 billion while analysts were expecting a rise of 0.2 percent.

June Business Inventories rose 0.4 percent to $1,743.1 billion. Sales rose 0.3 percent to $1,345.7 billion. Inventory to sales ratio read 1.29.

EIA Crude Inventories rose 1.4 million barrels versus a two million barrel decline expected.

EIA Gasoline Inventories declined 1.2 million barrels, more than the 1.1 million barrel decline expected.

EIA Distillates Inventories declined 2.4 million barrels versus expectations for a gain of 0.2 million barrels.

Eduardo Campos, a Brazilian presidential candidate died after his private jet crashed.

Japan's economy contracted in the second quarter as real gross domestic product fell 6.8 percent.

The Bank of England lowered its wage growth forecast to 1.25 percent from 2.50 percent. At the same time, unemployment fell to 6.4 percent, the lowest since late 2008.

Analyst Upgrades And Downgrades Of Note

Analysts at Deutsche Bank maintained a Buy rating on Aercap Holdings (NYSE: AER) with a price target raised to $60 form a previous $52. Also, analysts at Evercore Partners maintained an Overweight rating on Aercap Holdings with a price target raised to $60 form a previous $52. Shares gained 3.79 percent, closing at $47.64.

Analysts at Simmons & Co upgraded ConocoPhillips (NYSE: COP) to Overweight from Neutral. Shares gained 0.58 percent, closing at $80.89.

Analysts at JPMorgan maintained an Overweight rating on Cree (NASDAQ: CREE) with a price target lowered to $56 from a previous $62. Also, analysts at UBS maintained a Neutral rating on Cree with a price target lowered to $50 from a previous $55. Meanwhile, analysts at Summit Research downgraded Cree to Hold from Buy. Shares hit new 52-week lows of $44.11 before closing the day at $44.81, down 8.91 percent.

Analysts at RBC Capital Management upgraded Essex Property Trust (NYSE: ESS) to Outperform from sector Perform with a price target raised to $214 from a previous $188. Shares gained 1.58 percent, closing at $190.90.

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Analysts at Stifel Nicolaus upgraded Ford Motor (NYSE: F) to Buy from Hold with a $22 price target. Shares gained 1.22 percent, closing at $17.42.

Analysts at Piper Jaffray downgraded JDS Uniphase (NASDAQ: JDSU) to Neutral from Overweight with a price target lowered to $12 from a previous $14. Analysts at B. Riley also downgraded shares of JDS to Neutral from Buy with a price target lowered to $11.75 from a previous $15. Meanwhile, analysts at UBS maintained a Buy rating on JDS with a price target lowered to $14 from a previous $15. Shares lost 8.48 percent, closing at $10.90.

Analysts Nomura maintained a Buy rating on Kate Spade & Co (NYSE: KATE) with a price target lowered to $38 from a previous $43. Also, analysts at Citigroup maintained a Buy rating on Kate Spade with a price target lowered to $34 from a previous $44. Shares gained 7.76 percent, closing at $31.25.

Analysts at Deutsche Bank downgraded King Digital Entertainment (NYSE: KING) to Hold from Buy with a price target lowered to $12 from a previous $27 Also, analysts at Barclays downgraded King to Equal-weight from Overweight with a price target lowered to $16 from a previous $24. Analysts at Piper Jaffray downgraded shares to Neutral from Overweight with a price target lowered to $16 from a previous $28 while analysts at Credit Suisse maintained an Outperform rating on King with a price target lowered to $17 from a previous $28. Shares hit new 52-week lows of $13.65 before closing the day at $13.99, down 23.13 percent.

Analysts at RBC Capital management initiated coverage of Mobileye (NASDAQ: MBLY) with an Outperform rating and $43 price target. Shares lost 0.25 percent, closing at $32.15.

Analysts at BGC Partners downgraded Potash Corp (NYSE: POT) to Sell from Hold with a $30 price target. Shares lost 1.40 percent, closing at $34.44.

Analysts at UBS maintained a Neutral rating on Sprint (NYSE: S) with a price target lowered to $6 from a previous $8. Shares lost 0.68 percent, closing at $5.82.

Analysts at Credit Suisse maintained an Outperform rating on Tiffany & Co (NYSE: TIF) with a price target raised to $106 from a previous $104. Shares lost 2.58 percent, closing at $96.98.

Analysts at UBS maintained a Buy rating on United Technologies (NYSE: UTX) with a price target lowered to $124 from a previous $130. Shares gained 1.19 percent, closing at $105.56.

Analysts at JPMorgan maintained an Overweight rating on Visa (NYSE: V) with a price target raised to $243 from a previous $237. Shares gained 0.73 percent, closing at $211.43.

Equities-Specific News Of Note

WellPoint (NYSE: WLP) announced it will change its name to Anthem to better reflect the brand it uses for most of its insurance products. Shares gained 1.56 percent, closing at $110.35.

Health Care REIT (NYSE: HCN) has agreed to acquire HealthLease Properties Real Estate Investment Trust for C$14.20, representing an offer of around $950 million. Shares gained 2.27 percent, closing at $64.95.

AOL (NYSE: AOL) announced it will raise $300 million through a convertible note offering. The company said the proceeds will be used toward potential acquisitions and repurchasing shares. Shares gained 0.31 percent, closing at $42.46.

SolarCity (NASDAQ: SCTY) announced it will open a new operations center in Henderson Nevada to serve as a regional hub for Nevada residents and businesses. Shares gained 0.58 percent, closing at $71.12.

Procter & Gamble (NYSE: PG) introduced a $499 “Swash” machine designed to clean suits, slacks and blouses. Shares gained 0.07 percent, closing at $81.48.

According to The Information, Google (NASDAQ: GOOG) is engaging in discussions with Hewlett-Packard (NYSE: HPQ) and other companies to bring Google Now to the enterprise. Shares of Google gained 2.14 percent, closing at $574.78.

Constellation Brands (NYSE: STZ) announced that it will acquire the tequila brand Casa Noble for an undisclosed sum. The rating agency Moody's said that the acquisition is credit positive as it adds to the company's Mexican portfolio. Shares gained 0.17 percent, closing at $85.88

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Target (NYSE: TGT) announced it will begin a price-matching program in Canada while addressing inventory and merchandise issues as part of a turn around strategy. Shares lost 0.34 percent, closing at $58.26.

Winners Of Note

This morning, Canadian Solar (NASDAQ: CSIQ) reported its second quarter results. The company announced an EPS of $0.95, beating the consensus estimate of $0.58. Revenue of $623.80 million beat the consensus estimate of $577.65 million. Net income for the quarter rose to $55.8 million from $3.8 million in the same quarter a year ago as the company saw strong module demand in the U.K., Germany, Japan and the U.S. in addition to progress in the build-out of utility scale projects within Canada. Total solar module shipments in the quarter were 646 MW, higher than the company's guidance of 600 MW to 630 MW. The solar module shipments included 70 MW used in the company's total solutions business, an improvement from the 49 MW the company used in the prior quarter and 35 MW the company used a year ago. Gross margin for the quarter improved to 19 percent from 12.8 percent a year ago. The company issued guidance and sees its third quarter revenue being in a range of $760 million to $810 million with module shipments of 720 MW to 750 MW. The company also expects its gross margin to be in a range of 19 percent to 21 percent. Finally, Canadian Solar said that it is evaluation options of launching its own YieldCo and will make a decision by early 2015. Shares gained 23.95 percent, closing at $30.95.

JinkoSolar (NYSE: JKS) will invest more than $800 million to develop 500MW of solar power in Lishui, China. The project is expected to be completed by 2018. Shares gained 8.97 percent, closing at $27.32.

According to Bloomberg, Roche, Sanofi, GlaxoSmithKline and Actelion are preparing potential offers to acquire InterMune. (NASDAQ: ITMN) Reuters reported that InterMune is in the early stages of considering its strategic options including a sale of the company and has hired financial advisers to evaluate a potential deal. Shares of InterMune hit new 52-week highs of $54.57 before closing the day at $52.06, up 14.44 percent.

Pandora's (NYSE: P) CFO Michael Herring spoke at a Canaccord conference and said that average listener hours per month have risen from 17 to 21 hours. The executive also said that the company could continue growing its listener per hour growth over the mid-to long term through improved distribution channels and international expansion. Finally, Herring said that the company refuses to comment on M&A activity. Shares gained 10.31 percent, closing at $28.35.

Decliners Of Note

This morning, SeaWorld Entertainment (NYSE: SEAS) reported its second quarter results. The company announced an EPS of $0.43, missing the consensus estimate of $0.60. Revenue of $405.20 million missed the consensus estimate of $448.37 million. Net income for the quarter rose to $37.7 million from a net loss of $15.9 million in the second quarter as total attendance rose 0.3 percent to 6.6 million. However, guest spending fell 1.8 percent to $61.54 per visit during the quarter. Admission per capita fell by 2.5 percent to $37.86 as a result of an increase in promotional offerings. In-park capita spending declined slightly from $23.81 to $23.68 in the quarter. The company noted that last year's comparable consisted of the opening of Antarctica: Empire of the Penguin section in Orlando. The company issued guidance and sees its full year 2014 revenue to fall six percent to seven percent from a year ago while adjusted EBITDA is expected to come in 14 percent to 16 percent lower. The company also authorized a $250 million share repurchase program reflecting “confidence in the health and long-term outlook of the company.” Shares hit new 52-week lows of $18.17 before closing the day at $18.90, down 32.86 percent.

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This morning, Macy's (NYSE: M) reported its second quarter results. The company announced an EPS of $0.80, missing the consensus estimate of $0.86. Revenue of $6.27 billion missed the consensus estimate of $6.30 billion. Net income for the quarter rose to $292 million from $281 million in the same quarter a year ago as comparable-store sales rose four percent as weather patterns improved. The company noted that its recent investments in technology also help drive sales across the U.S. However, gross margin for the quarter fell 40 basis points to 41.4 percent while merchandise inventories fell 2.5 percent to $5.42 billion. The company maintained previous guidance for comparable store growth of two percent to three percent. However, the company was unable to make up the sales shortfall from the first quarter which yields a full-year comparable sales growth of 1.5 percent to two percent, below prior guidance of comparable sales to increase by 2.5 percent to three percent. The company maintained its full-year 2014 EPS guidance in a range of $4.40 to $4.50. Shares lost 5.49 percent, closing at $56.47.

Earnings of Note

This morning, Deere & Company (NYSE: DE) reported its third quarter results. The company announced an EPS of $2.33, beating the consensus estimate of $2.20. Revenue of $9.50 billion missed the consensus estimate of $8.75 billion while net sales of equipment were $8.723 billion in the quarter. Net income for the quarter fell to $850.7 million from $996.5 million in the same quarter a year ago as worldwide net sales fell five percent from a year ago. The company noted a moderating condition in the global farm sector which negative affected demand for farm machinery. At the same time, the company's construction and forestry as well as its financial services divisions showed a higher profit. Deere's Agriculture and turf operating profit fell from $1.336 billion a year ago to $941 million while Construction and forestry's operating profit rose from $107 million a year ago to $194 million and Financial services' operating profit rose from $234 million a year ago to $249 million. Deere issued guidance and sees its total fiscal 2014 sales to decrease by six percent and to be down by approximately eight percent in the fourth quarter. Deere plans to scale back production of agriculture products to better respond to changes in market conditions. Net income is guided to be approximately $3.1 billion. Shares lost 2.29 percent, closing at $84.49.

This morning, Pinnacle Foods (NYSE: PF) reported its second quarter results. The company announced an EPS of $0.33, in-line with the consensus estimate. Revenue of $617.80 million missed the consensus estimate of $629.33 million. Net income for the quarter rose to $35.6 million from a net loss of $31.8 million in the same quarter a year ago as sales rose nine percent from a year ago driven by the Wish-Bone acquisition. Net sales for the Birds Eye Frozen segment rose one percent to $246.2 million; net sales of Duncan Hines Grocery rose 21 percent to $290 million while net sales for the Specialty Foods segment declined five percent to $81.6 million. The company reaffirmed its prior EPS guidance for the full fiscal year to be in a range of $1.70 to $1.75 while input cost inflation remains unchanged at two percent. Shares gained 1.49 percent, closing at $31.40.

After the market closed, NetApp (NASDAQ: NTAP) reported its first quarter results. The company announced an EPS of $0.60, beating the consensus estimate of $0.57. Revenue of $1.49 billion beat the consensus estimate of $1.47 billion.

After the market closed, Cisco (NASDAQ: CSCO) reported its fourth quarter results. The company announced an EPS of $0.55, beating the consensus estimate of $0.53. Revenue of $12.40 billion beat the consensus estimate of $12.14 billion.

Quote Of The Day

"No matter what people tell you, words and ideas can change the world." -Robin Williams.

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