Market Overview

Markets Little Changed In Low Volume And Slow News Ahead Of Long Weekend

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U.S. stocks were little changed with the S&P 500 closing for the second straight day above the 2,000 mark.

Markets were on track for a flat open and volume and volatility remained relatively light throughout the trading session as geopolitical events remain in focus.

Israel and Gaza have agreed to a full open-ended ceasefire while Ukraine's President Poroshenko pledged to put together a ceasefire plan after meeting with Russia's President Putin.

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  • The Dow gained 0.09 percent, closing at 17,122.01.
  • The S&P 500 gained 0.00 percent, closing at 2,000.12.
  • The Nasdaq lost 0.02 percent, closing at 4,569.62.
  • Gold lost 0.12 percent, trading at $1,283.60 an ounce.
  • Oil lost 0.01 percent, trading at $93.85 an ounce.
  • Silver gained 0.18 percent, trading at $19.42.

News Of Note

MBA Mortgage Composite Index rose 2.8 percent after rising 1.4 percent last week.

MBA Mortgage Purchase Index fell 0.4 percent, matching last week's decline.

MBA Mortgage Refinance Index rose three percent, matching last week's gain.

EIA Crude Inventories fell 2.1 million barrels versus a decline of 2.5 million barrels expected.

EIA Gasoline Inventories fell one million barrels versus a decline of 1.7 million barrels expected.

EIA Distillates Inventories rose 1.3 million barrels versus a decline of 1.2 million barrels expected.

The U.S. will not proceed with previous plans to implement import duties on specialized steel items from Japan, Germany and Poland.

Analyst Upgrades And Downgrades Of Note

Analysts at Blair initiated coverage of Akamai Technologies (NASDAQ: AKAM) with an Outperform rating and $71 price target. Shares lost 0.10 percent, closing at $60.50.

Analysts at UBS upgraded Aruba Networks (NASDAQ: ARUN) to Buy from Neutral with a price target raised to $25 from a previous $21. Also, analysts at Barclays maintained a Buy rating on Aruba Networks with a price target raised to $25 from a previous $21. Meanwhile, analysts at Stifel Nicolaus maintained a Buy rating on Aruba Networks with a price target raised to $26 from a previous $24. Shares gained 5.04 percent, closing at $21.26.

Analysts at Keefe Bruyette & Woods maintained a Market Perform rating on Berkshire Hathaway (NYSE: BRK-A) with a price target raised to $201,580 from a previous $199,450. Shares gained 0.08 percent, closing at $204,741.00.

Analysts at Deutsche Bank initiated coverage of Bristol-Myers Squibb (NYSE: BMY) with a Hold rating and $52 price target. Shares lost 1.02 percent, closing at $50.25.

Analysts at Deutsche Bank initiated coverage of Eli Lilly (NYSE: LLY) with a Buy rating and $71 price target. Shares gained 0.30 percent, closing at $63.00.

Analysts at Janney Capital downgraded Facebook (NASDAQ: FB) to Neutral from Buy while maintain a $82.50 price target. Shares lost 1.75 percent, closing at $74.63.

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Analysts at Baird initiated coverage of Garmin (NASDAQ: GRMN) with a Neutral rating and $59 price target. Shares lost 4.99 percent, closing at $54.59.

Analysts at Macquarie upgraded Level 3 Communications (NASDAQ: LVLT) to Outperform from Neutral with a price target raised to $51 from a previous $49. Shares gained 4.02 percent, closing at $44.74.

Analysts at Deutsche Bank initiated coverage of Merck (NYSE: MRK) with a Hold rating and $63 price target. Shares hit new 52-week highs of $60.58 before closing the day at $60.28, up 0.13 percent.

Analysts at DA Davidson initiated coverage of Netsuite (NYSE: N) with a Buy rating and $109 price target. Shares gained 0.62 percent, closing at $87.07.

Analsysts at DA Davidson initiated coverage of Oracle (NYSE: ORCL) with a Neutral rating and $46 price target. Shares lost 0.48 percent, closing at $41.64.

Analysts at Deutsche Bank initiated coverage of Pfizer (NYSE: PFE) with a Buy rating and $34 price target. Shares gained 0.96 percent, closing at $29.49.

Analysts at Dougherty & Co downgraded Smith & Wesson Holding (NASDAQ: SWHC) to Neutral from Buy while removing a previous $17.50 price target. Also, analysts at Benchmark maintained a Buy rating on Smith & Wesson with a price target lowered to $15 from a previous $20 while analysts at CRT Capital also maintained a Buy rating on Smith & Wesson with a price target lowered to $15 from a previous $18. Meanwhile, analysts at KeyBanc maintained an Underweight rating on Smith & Wesson with a price target lowered to $10 from a previous $11. Shares lost 13.59 percent, closing at $11.32.

Analysts at Canaccord Genuity maintained a Hold rating on Sprint (NYSE: S) with a price target lowered to $5.75 from a previous $7.50. Also, analysts at Barclays maintained an Equal-weight rating on Sprint with a price target lowered to $6 form a previous $9. Shares lost 1.39 percent, closing at $5.69.

Analysts at Barclays maintained an Overweight rating on T Mobile U.S. (NYSE: TMUS) with a price target lowered to $35 from a previous $37. Shares lost 0.10 percent, closing at $29.44.

Analysts at DA Davidson initiated coverage of Workday (NYSE: WDAY) with a Neutral rating and $89 price target. Shares lost 0.53 percent, closing at $90.30.

Equities-Specific News Of Note

Baidu (NASDAQ: BIDU) along with Tencent Holdings and Dalian Wanda plan to form an e-commerce joint venture to counter against Alibaba. Shares of Baidu lost 0.29 percent, closing at $215.46.

McDonald's (NYSE: MCD) plans to appeal a decision by Russian courts to close three restaurants in Moscow due to unsanitary conditions. Shares gained 0.57 percent, closing at $94.65.

Various media reports indicated that Scorpio Tankers (NYSE: STNG) has hired advisers to consult on a potential formation of an MLP. Shares gained 4.35 percent, closing at $9.83.

Elizabeth Arden (NASDAQ: RDEN) said that it will evaluate the $20.39 tender offer made last week by Rhone Capital. Shares gained 2.95 percent, closing at $17.79.

According to Reuters, Dow Chemical (NYSE: DOW) has hired bankers to advise the company on selling two of its specialty chemicals subsidiaries for approximately $2 billion. Shares gained 1.02 percent, closing at $53.64.

Tyson Foods (NYSE: TSN) and Hillshire Brands (NYSE: HSH) confirmed they have reached a settlement with the Department of Justice over its planned merger. As part of the agreement, Tyson Foods will need to divest its Heinold Hog Markets sow purchasing business. Shares of Tyson Foods gained 1.52 percent, closing at $37.71 while shares of Hillshire Brands hit new 52-week highs of $62.98 after experiencing a mini-flash crash and trading as low as $59.20 and then closing the day at $62.96, up 0.05 percent.

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It was speculated that Fannie Mae (OTC: FNMA) is planning to issue stock on the NYSE following a job posting on its website for a corporate attorney with experience in NYSE listing requirements. However, a spokesperson said that the company has no plans to move to the “Big Board” and plans to remain listed on OTC. Shares gained 2.08 percent, closing at $3.93.

United Technologies (NYSE: UTX) plans to increase its share repurchases for the year to $1.35 billion from a previous $1.25 billion. At the same time the company also confirmed 2014 EPS guidance of $6.75 to $6.85 and revenues of approximately $65 billion. Shares lost 0.54 percent, closing at $109.09.

According to Re/code, Apple (NASDAQ: AAPL) may show off a new wearable device in addition to the iPhone 6 during an event on September 9. Shares hit new 52-week highs of $102.57 before closing the day at $102.13, up 1.23 percent.

According to Bloomberg, Ryanair (NASDAQ: RYAAY) is expected to be one of the bidders for Cyprus Airways. Shares of Ryanair gained 4.03 percent, closing at $55.44.

Winners Of Note

This morning, Express (NASDAQ: EXPR) reported its second quarter results. The company announced an EPS of $0.08, beating the consensus estimate of $0.00. Revenue of $481.42 million beat the consensus estimate of $457.68 million. Net income for the quarter fell to $6.9 million from $16.9 million in the same quarter a year ago as comparable-store sales fell five percent in the quarter. Gross margin as a percentage of net sales fell 280 basis points to 28.3 percent of net sales while SG&A expenses rose to $121.9 million from $119.2 million and represented 25.3 percent of net sales (100 basis points higher than a year ago) due to additional marketing activities and a decline in total sales. The company issued guidance and sees its full-year EPS being $0.85 to $0.91. The company previously expected its full-year EPS being in a range of $0.74 to $0.90. The company expects its EPS in the third quarter being in a range of $0.13 to $0.18. Shares gained 12.75 percent, closing at $16.45.

This morning, The Michaels Company (NYSE: MIK) reported its second quarter results. The company announced an EPS of $0.15, beating the consensus estimate of $0.08. Revenue of $948.0 million beat the consensus estimate of $942.99 million. Net income for the quarter was a net loss of $48 million while adjusted net income which excludes IPO costs and other related expenses was $30 million compared to $21 million in the same quarter a year ago. During the quarter, Michaels saw its comparable-store sales rise 3.2 percent and its gross profit rate improved by 40 basis points to 37.7 percent. The company also saw its operating margin rate improve by 90 basis points to 9.1 percent while SG&A expense ratio fell 50 basis points to 28.1 percent. The company expects to open 21 new stores in the second half of the year which should yield a sales growth of one percent to two percent. Michaels issues guidance and sees its full year EPS being in a range of $1.38 to $1.42, above the consensus estimate of $1.35. Shares gained 9.25 percent, closing at $16.54.

Earnings Of Note

This morning, Tiffany & Co (NYSE: TIF) reported its second quarter results. The company announced an EPS of $0.96, beating the consensus estimate of $0.85. Revenue of $992.93 million beat the consensus estimate of $987.86 million. Net earnings for the quarter rose to $124.12 million from $106.78 million in the same quarter a year ago as comparable-store sales rose three percent in the quarter and revenue grew in every region, except for Japan. Revenues in the Americas rose nine percent from a year ago to $484 million; Asia-Pacific revenue rose 14 percent to $237 million; Europe revenue rose eight percent to $120 million while revenue from Japan fell 13 percent to $119 million partially due to an increase in the country's consumption tax on April. The company saw its gross margin rate improve by 80 basis points to 59.9 percent while operating margin rose ten basis points to 21.0 percent. The company raised its full year fiscal guidance and sees its EPS being in a range of $4.20 to $4.30 from a previous guidance of $4.15 to $4.25. Shares hit new 52-week highs of $105.66 before closing the day at $101.75, up 0.97 percent.

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In a revised F-1 Filing, Alibaba stated that it saw revenues of $2.54 billion in the second quarter and a net income of $1.99 billion. Free cash flow was $1.71 billion while sales and marketing spend rose 70 percent from a year ago to $195 million and R&D expenses rose 68 percent to $315 million. Revenue from mobile devices more than doubled from the previous quarter to $400 million. Annual orders rose 14 percent from a quarter ago to 14.5 billion; annual active buyers rose nine percent to 270 million and annual active sellers rose 11 percent to 8.5 million. Separately, The New York Times reported that Alibaba could provide an IPO price range as soon as this coming Tuesday.

After the market closed, Williams-Sonoma (NYSE: WSM) reported its second quarter results. The company announced an EPS of $0.53, in-line with the consensus estimate. Revenue of $1.04 billion missed the consensus estimate of $1.05 billion. Shares were trading lower by 11.0 percent at $66.65 following the earnings release.

Quote Of The Day

“To Rich Handler, will get back to you shortly on #ALSChallenge, but right now too busy working on BIG deal with another investment banker” – A Tweet by Carl Icahn.

Posted-In: Akami TechnologiesEarnings News Econ #s Economics After-Hours Center Markets Movers Best of Benzinga

 

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