Market Overview

Markets Gather Some Momentum As Volume Remains Light, Geopolitical Tension Improving

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U.S. stocks rose to close the day with moderate gains despite a larger than expected increase in jobless claims.

“The end of 2015 Q1 is still my preferred liftoff date,” St. Louis Fed President Jim Bullard told The Wall Street Journal. The end of the first quarter is ahead of the second half of 2015 timetable that the Fed President Janet Yellen previously hinted at.

Bullard also said that “we're way ahead of schedule for labor-market improvement” and that unemployment “could go below six percent by the time we end bond buys.”

Looking forward to the day ahead, PPI and industrial production figures will be released Friday morning.

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  • The Dow gained 0.37 percent, closing at 16,713.58.
  • The S&P 500 gained 0.43 percent, closing at 1,955.18.
  • The NASDAQ gained 0.43 percent, closing at 4,453.00.
  • Gold lost 0.04 percent, trading at $1,314.00 an ounce.
  • Oil lost 2.18 percent, trading at $95.46 a barrel.
  • Silver gained 0.25 percent, trading at $19.90 an ounce.

News Of Note

  • Initial Jobless Claims rose 21,000 to 311,000, above the consensus of 295,000.
  • July Import Prices declined 0.2 percent month over month, in-line with the consensus.
  • July Export Prices remained flat month over month, above expectations for a decline of 0.1 percent.
  • EIA Natural Gas Inventory rose 78 bcf, less than the expected gain of 83 bcf.
  • Eurozone GDP saw a 0.2 percent growth in annualized terms, down from the first quarter's 0.8 percent pace. German GDP declined 0.2 percent from the first quarter, as did Italy's.

Analyst Upgrades And Downgrades Of Note

Analysts at Tigress Financial downgraded Bloomin' Brands (NASDAQ: BLMN) to Neutral from Buy. Shares lost 2.51 percent, closing at $16.28.

Analysts at Credit Suisse upgraded China Mobile (NYSE: CHL) to Outperform from Neutral. Shares hit new 52-week highs of $58.85 before closing the day at $58.34, up 3.17 percent.

Analysts at Stifel Nicolaus maintained an Equal-Weight rating on Cisco Systems (NASDAQ: CSCO) with a price target raised to $26 from a previous $25. Also, analysts at UBS maintained a Buy rating on Cisco with a price target raised to $29 from a previous $26.50. As well, analysts at Barclays maintained an Equal-Weight rating on Cisco with a price target raised to $26 from a previous $25. Shares lost 2.70 percent, closing at $24.52.

Analysts at Credit Suisse maintained an Outperform rating on Deere & Company (NYSE: DE) with a price target lowered to $98 from a previous $104. Shares gained 0.44 percent, closing at $84.86.

Analysts at Guggenheim Securities upgraded Dresser-Rand Group (NYSE: DRC) to Buy from Neutral with a $100 price target. Shares gained 0.78 percent, closing at $64.52.

Analysts at Credit Suisse maintained a Neutral rating on Exxon Mobil (NYSE: XOM) with a price target raised to $95 from a previous $90. Shares finished the day unchanged at $99.09.

Analysts at Stifel Nicolaus downgraded Freeport-McMoRan (NYSE: FCX) to Hold from Buy while removing a previous $37 price target. Shares lost 0.93 percent, closing at $36.05.

Analysts at Wunderlich initiated coverage of Guess? (NYSE: GES) with a Buy rating and $31 price target. Shares gained 1.76 percent, closing at $25.48.

Analysts at Deutsche Bank maintained a Hold rating on Health Care REIT (NYSE: HCN) with a price target raised to $60 from a previous $58. Shares gained 1.15 percent, closing at $65.70.

Analysts at Evercore Partners upgraded Liberty Media (NASDAQ: LMCA) to Overweight from Equal-Weight with a price target raised to $57 from a previous $53.74. shares gained 3.83 percent, closing at $48.54.

Analysts at Credit Suisse initiated coverage of Molson Coors Brewery (NYSE: TAP) with an Outperform rating. Shares gained 3.24 percent, closing at $74.90.

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Analysts at Needham upgraded NetApp (NASDAQ: NTAP) to Buy from Hold with a $49 price target. Also, analysts at UBS maintained a Neutral rating on NetApp with a price target raised to $43 from a previous $36. Meanwhile, analysts at Deutsche Bank maintained a Hold rating on NetApp with a price target raised to $40 from a previous $35. Shares gained 5.27 percent, closing at $41.37.

Analysts at Barclays maintained an Equal-Weight rating on Noodles & Co (NASDAQ: NDLS) with a price target lowered to $22 from a previous $35. Also, analysts at UBS maintained a Neutral rating on Noodles with a price target lowered to $26 from a previous $30. Shares hit new 52-week lows of $19.54 before closing the day at $21.16, down 16.08 percent.

Analysts at Stephens & Co upgraded Pinnacle Foods (NYSE: PF) to Overweight from Equal-Weight. Shares gained 0.19 percent, closing at $31.46.

Analysts at Wells Fargo downgraded SeaWorld Entertainment (NYSE: SEAS) to Market Perform from Outperform. Also, analysts at Macquarie downgraded SeaWorld to Neutral from Outperform while analysts at Barclays downgraded SeaWorld to Underweight from Overweight. Not issuing a downgrade, analysts at JPMorgan maintained a Neutral rating on SeaWorld with a price target lowered to $21 from a previous $34. Shares hit new 52-week lows of $17.83 before closing the day at $18.00, down 4.76 percent.

Analysts at Morgan Stanley initiated coverage of SolarCity (NASDAQ: SCTY) with an Equal-Weight rating and $92 price target. Shares gained 0.15 percent, closing at $71.19.

Analysts at Gabelli & Co downgraded Wynn Resorts (NYSE: WYNN) to Hold from Buy. Shares gained 0.44 percent, closing at $202.23.

Equities-Specific News Of Note

Sweden based Electrolux, along with other interested parties are in talks with General Electric (NYSE: GE) to acquire its appliances business. Shares of General Electric gained 0.19 percent, closing at $25.88.

NRG Energy (NYSE: NRG) has agreed to acquire Goal Zero, a maker of solar-charged batter packs for an undisclosed sum. Shares gained 0.41 percent, closing at $29.42.

Netflix (NASDAQ: NFLX) announced a new lineup of stand-up comedy shows, including Chelsea Handler's premier on October 10 and a Bill Cosby feature premiering on November 28. Shares lost 0.15 percent, closing at $450.87.

Keurig Green Mountain (NASDAQ: GMCR) announced it will raise the price of its K-Cup packs by nine percent as of November 3. Shares gained 0.22 percent, closing at $114.30.

General Motors (NYSE: GM) announced it will invest $2.8 billion in Brazil over the next five years. Shares finished the day unchanged at $33.95.

The Securities and Exchange Commission is looking into Valeant Pharmaceuticals (NYSE: VRX) hostile takeover attempts of Allergan (NYSE: AGN) on alleged violations of insider trading laws. Shares of Valeant gained 1.71 percent, closing at $111.04 while shares of Allergan gained 0.45 percent, closing at $155.60.

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Winners Of Note

This morning, Perrigo (NYSE: PRGO) reported its fourth quarter results. The company announced an EPS of $1.74, beating the consensus estimate of $1.55. Revenue of $1.14 billion beat the consensus estimate of $1.09 billion. Net income for the quarter for the quarter rose to $131.7 million from $118.5 million in the same quarter a year ago as sales rose 18 percent from a year ago. The company stated that its record sales were driven primarily by new product sales of $65 million, $112 million in sales attributable to its recently acquired Elan, and product acquisitions from Fera Pharmaceuticals and Aspen Global. Gross margin improved to a company record of 44.5 percent with GAAP gross margin of 36.5 percent and a quarterly adjusted operating margin of 28.4 percent, with GAAP operating margin of 17.3 percent. Perrigo issued guidance and sees its fiscal 2015 net income being in a range of $546.1 million to $586.6 million. Earnings per share for fiscal 2015 are expected to be in a range of $7.20 to $7.50. Shares gained 7.29 percent, closing at $149.29.

This morning, Advanced Auto Parts (NYSE: AAP) reported its second quarter results. The company announced an EPS of $2.08, beating the consensus estimate of $2.01. Revenue of $2.35 billion beat the consensus estimate of $2.32 billion. Net income for the quarter rose to $139.49 million from $13.68 million in the same quarter a year ago as comparable-store sales rose 2.6 percent in the quarter. Total sales for the quarter rose 51.5 percent from a year ago, partially due to the acquisition of General Parts and the addition of new stores over the past year. However, gross profit rate for the quarter declined to 45.2 percent of sales from 50.3 percent a year ago due to a higher mix of commercial sales which have a lower gross margin rate. The company did see its SG&A rate fall to 34.0 percent of sales from 37.6 percent a year ago as a result of the General Parts acquisition which has a lower SG&A costs and fixed cost leverage from the positive sales performance. Shares gained 7.04 percent, closing at $131.59.

NewLink Genetics (NASDAQ: NLNK) stated that it has enough doses of an Ebola vaccine to begin a trial involving 20 to 100 healthy volunteers in a matter of weeks. The company also said it has two or three contract manufacturers standing by to produce tens of thousands of doses within a month or two. Shares gained 11.60 percent, closing at $26.16.

Decliners Of Note

This morning, E-Commerce China Dangdang (NYSE: DANG) reported its second quarter results. The company announced an EPS of $0.06, beating the consensus estimate of $0.02. Revenue of $316.10 million beat the consensus estimate of $314.28 million. Net income for the quarter for the quarter rose to RMB28.8 million ($4.6 million) from a net loss of RMB63.9 million in the same quarter a year ago as the company saw revenue gains in its main categories. Media revenue rose 43.5 percent from a year ago to $218.6 million; General Merchandise revenue rose 8.2 percent to $84.5 million; Marketplace GMC revenue rose 81.6 percent to $230.7 million while Other revenue rose 26.1 percent to $13 million. Gross margin improved from 18.2 percent last quarter to 18.3 percent. Fulfillment spend fell to 9.7 percent of revenue from 12 percent a year ago while active customers rose 23 percent from a year ago to 8.5 million, which is slightly lower than last quarter. However, the company guided its third quarter revenue to be RMB1.984 billion ($322.50 million), below the consensus estimate of $325.7 million. Shares lost 11.19 percent, closing at $14.36.

This morning, Red Robin Gourmet Burgers (NASDAQ: RRGB) reported its second quarter results. The company announced an EPS of $0.68, missing the consensus estimate of $0.90. Revenue of $256.10 million missed the consensus estimate of $263.37 million. Net income for the quarter fell to $9.47 million from $11.14 million in the same quarter a year ago, as total traffic fell 2.5 percent. Comparable-restaurant sales rose 1.2 percent, while the average check rose 3.7 percent. However, restaurant-level operating margin declined by 110 basis points to 22.2 because of higher food and beverage costs, and to a lesser extent, higher operation costs and occupancy as a percentage of sales. The company issued guidance and sees its comparable restaurant revenue growth being in the low-single-digits. The company plans to open 20 new Red Robin restaurants and four to five Red Robin Burger Works. The new restaurants are expected to add $44 million in revenue in the second half of 2014. Also, the company expects its restaurant-level operating profit margin to be approximately 21.3 percent. Shares hit new 52-week lows of $50.50 before closing the day at $52.63, down 18.47 percent.

Earnings Of Note

This morning, Kohl's (NYSE: KSS) reported its second quarter results. The company announced an EPS of $1.13, beating the consensus estimate of $1.07. Revenue of $4.24 billion missed the consensus estimate of $4.28 billion. Net income for the quarter improved to $232 million from $231 million in the same quarter a year ago despite a decline of 1.3 percent in comparable-store sales. Gross margin declined by 10 basis points from a year ago to 39.0 percent, while inventory rose 1.1 percent to $3.9 billion. The company ended the quarter with 1,160 stores in 49 states, compared with 1,155 stores a year ago. Shares gained 3.27 percent, closing at $56.91.

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This morning, Walmart (NYSE: WMT) reported its second quarter results. The company announced an EPS of $1.21, in-line with the consensus estimate. Revenue of $119.30 billion beat the consensus estimate of $118.98 billion. Net income for the quarter rose to $4.09 billion from $4.07 billion in the same quarter a year ago despite U.S. traffic declining by 1.1 percent and the average ticket rose by 1.1 percent. Total U.S. net sales were $70.6 billion, an improvement from last year's $68.73 billion. Sam's Club comp traffic rose 0.3 percent in the quarter while average ticket declined by 0.3 percent. Total Sams Club sales rose from $14.53 billion a year ago to $14.86 billion in the quarter. E-commerce sales added 30 basis points to the company's comp in the quarter, while International revenue rose 3.1 percent to $33.9 billion. Walmart issued guidance and lowered its full-year earnings per share expectations to a range of $4.90 to $5.15 from a previous range of $5.10 to $5.45. Third quarter earnings per share is expected to be in a range of $1.10 to $1.20. Shares gained 0.49 percent, closing at $74.39.

After the market closed, Agilent (NYSE: A) reported its third quarter results. The company announced an EPS of $0.78, beating the consensus estimate of $0.74. Shares were trading lower by 0.22 percent at $55.50 following the earnings report.

After the market closed, Nordstrom (NYSE: JWN) reported its second quarter results. The company announced an EPS of $0.95, in-line with the consensus estimate. Revenue of $3.39 billion was also in-line with the consensus estimate. Shares were trading lower by 1.15 percent at $67.90 following the earnings report.

After the market closed, J.C. Penney (NYSE: JCP) reported its second quarter results. The company announced an EPS of -$0.56, beating the consensus estimate of -$0.93. Revenue of $2.80 billion beat the consensus estimate of $2.78 billion. Shares were trading higher by 5.34 percent at $10.26 following the earnings report.

Quote Of The Day

"In view of the unusual market activity in the company's stock today, the New York Stock Exchange contacted the company in accordance with its usual practice. The company stated that its policy is not to comment on unusual market activity.” –Statement provided by USEC (NYSE: USU) following unusual market activity in the company's stock. Shares hit a daily high of $7.13 before closing the day at $6.15, up 34.57 percent. Shares were trading within a normal range in the early morning trading session before soaring mid-morning.

Posted-In: Advanced Auto PartsEarnings News Econ #s Economics After-Hours Center Markets Movers Best of Benzinga

 

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