Market Wrap For March 7: Markets Cap Off Positive Week With Small Gains
U.S. stocks were mixed as investors continue to follow the standoff in Ukraine and digested February's jobs report which indicated that harsh winter weather could be the culprit behind weakness seen in recent economic data reports.
The S&P 500 trading at new all time highs at 1,883.57 but finished the day virtually unchanged.
The Dow gained 0.19 percent, closing at 16,452.72.
The S&P 500 gained 0.05 percent, closing at 1,878.04. The Nasdaq lost 0.37 percent, closing at 4,336.22. Gold lost 0.86 percent, trading at $1,340.50 an ounce. Oil gained 1.00 percent, trading at $102.58 a barrel. Silver lost 3.05 percent, trading at $20.92 an ounce.
News of Note
February Nonfarm payrolls increased by 175,000, above the consensus for an increase of 154,000. The unemployment rate inched higher to 6.7 percent from 6.6 percent.
As expected, Shanghai Chaori Solar Energy Science & Technology has failed to pay 89.8 million yuan ($14.7 million) in interest that was due today. This marks the first major domestic default in China's $1.5 trillion corporate bond market.
Copper futures in New York saw its largest decline since 2011 as investor fear persists that China's slowing Growth will translate to a lower demand in the country which accounts for 40 percent of global copper demand.
Analyst Upgrades and Downgrades of Note
Analysts at Barclays maintained an Equal-weight rating on Allergan (NYSE: AGN) with a price target raised to $130 from a previous $95. Shares gained 0.86 percent, closing at $127.96.
Analysts at Barclays maintained an Overweight rating on Biogen (NYSE: BIIB) with a price target raised to $352 from a previous $325. Shares lost 3.58 percent, closing at $328.51.
Analysts at Barclays maintained an Equal-weight rating on Charter Communications (NASDAQ: CHTR) with a price target lowered to $127 from a previous $133. Separately, analysts at Northland Securities upgraded shares to Outperform from Market Perform with a $146 price target. Shares gained 0.16 percent, closing at $126.84.
Analysts at B. Riley & Co initiated coverage of Salesforce.com (NYSE: CRM) with a Neutral rating and $65 price target. Shares lost 3.82 percent, closing at $60.73.
Analysts at Credit Suisse upgraded GT Advanced Technologies (NASDAQ: GTAT) to Outperform from Neutral with a price target raised to $24 from $18. Shares hit new 52 week highs of $18.02 before closing the day at $17.50, up 3.06 percent.
Analysts at Barclays reinstated coverage of Jazz Pharmaceuticals (NASDAQ: JAZZ) with an Overweight rating and $200 price target. Shares gained 2.48 percent, closing at $155.24.
Analysts at Barclays maintained an Equal-weight rating on Joy Global (NYSE: JOY) with a price target raised to $60 from a previous $56. Shares lost 0.53 percent, closing at $56.82.
Analysts at Ascendiant Capital initiated coverage of MGM Resorts (NYSE: MGM) with a Buy rating and $33 price target. Shares hit new 52 week highs of $28.74 before reversing gains and closing the day at $28.31, down 0.28 percent.
Analysts at Macquarie upgraded Sirius XM Radio (NASDAQ: SIRI) to Outperform from Neutral with a $4 price target. Shares lost 0.98 percent, closing at $3.52.
Analysts at Barclays upgraded Teva Pharmaceuticals (NASDAQ: TEVA) to Overweight from Equal-weight with a price target raised to $65 from a previous $42. Shares lost 1.10 percent, closing at $49.27.
Equities-Specific News of Note
Twitter's (NYSE: TWTR) first ever 10-k filling shows the company's ad engagements increased 74 percent quarter over quarter while the company's average cost per engagement fell 18 percent quarter over quarter and 69 percent year over year. Shares lost 2.37 percent, closing at $53.53.
According to the Los Angeles Times, Tesla Motors (NASDAQ: TSLA) eliminated California as a potential site for its Gigafactory. Shares lost 2.65 percent, closing at $246.23.
General Electric (NYSE: GE) issued a $3 billion bond sale consisting of $2.25 billion of 30-year notes and $750 million in ten year paper. Shares lost 0.49 percent, closing at $26.09.
Novartis' (NYSE: NVS) Jakavi treatment has achieved its main goal in a Phase III trial of maintaining red-blood cell volume in patients with polycythemia vera, a deadly form of cancer. Shares lost 0.81 percent, closing at $83.14.
Cliffs Natural Resources (NYSE: CLF) has attempted to reach a good faith settlement with activist hedge fund Casablanca Capital by offering the fund two independent director seats at the board of directors. Casabalanca has other plans and is nominating six directors. Shares lost 2.43 percent, closing at $18.64.
Facebook's (NASDAQ: FB) Instagram struck a $100 million commitment from top ad agency Omnicom to advertise on the platform. Instagram is also talking with Starcom MediaVest, another top ad agency. Shares lost 1.48 percent, closing at $69.79.
Steven Cohen's SAC Capital Advisors said on Thursday that has assumed a 5.4 percent stake in Gogo. (NADAQ: GOGO) In a regulatory filing, SAC disclosed it owns 4.5 million shares. Shares gained 2.10 percent, closing at $24.80.
Private equity firm Cerberus has reached a preliminary deal to acquire Safeway (NYSE: SWY) at a reported $40 per share price tag, giving the enterprise an implied value of approximately $9 billion. Cerberus is the parent company of supermarket chain Albertsons. Safeway's board of directors unanimously approved the deal. Albertsons and Cerebrus will pay $32.50 per share in cash, distribute proceeds from the sale of Safeway's real estate assets (estimated at $3.65 per share) and distribute Safeway's 37.8 million share position of Blackhawk Network currently valued at $3.95. The deal comes with a 21-day go-shop period and has a $400 million termination fee. Shares of Safeway lost 1.95 percent, closing at $38.70.
AMD's (NYSE: AMD) CEO Rory Read was a guest on CNBC's Fast Money yesterday and detailed how the company is shifting itself to have less exposure to the PC market and create long term relationships (such as PS4 and Xbox One) to transform the company. Shares gained 5.90 percent, closing at $3.95.
Total (NYSE: TOT) is considering a sale of its TotalGAz liquefied petroleum gas marketing unit for approximately $1.04 billion. Shares lost 0.82 percent, closing at $64.39.
AstraZeneca (NYSE: AZN) said that its Nexium therapy is safe despite an FDA-imposed ban on US shipments on a key ingredient's manufacturer. Shares gained 0.15 percent, closing at $66.94.
The most recent data from IRI shows Green Mountain Coffee Roasters (NASDAQ: GMCR) maintaining its market lead in the crowded single market with a 20 percent market share. Starbucks (NASDAQ: SBUX) has a 13 percent market share and total unit growth sales rose 47 percent year over, outpacing Green Mountain's 29 percent growth. Low-cost private labels as a group saw combined unit growth sales surge 470 percent year over year. Shares of Green Mountain lost 1.05 percent, closing at $106.00 while Starbucks gained 0.52 percent, closing at $73.07.
Visa (NYSE: V) and MasterCard (NYSE: MA) said they had launched a cross-industry group to improve security for card transactions and inflicted a 2015 deadline on retailers and banks to adapt technology changes to make it safer to pay with plastic. Shares of Visa gained 0.76 percent, closing at $225.56 while MasterCard gained 0.40 percent, closing at $77.94.
Aaron's (NYSE: AAN) said that a special committee is in the process of reviewing strategic options for the company. Shares gained 1.87 percent, closing at $30.48.
Disney (NYSE: DIS) is working with China's Shanghai Media Group Pictures to develop Disney-branded movies. Shares hit new 52 week highs of $83.65 before reversing gains and closing the day at $82.21, down 1.36 percent.
Winners of Note
This morning, Big Lots (NYSE: BIG) reported its fourth quarter results. The company announced an EPS of $1.45, beating the consensus estimate of $1.42. Revenue of $1.64 billion beat the consensus estimate of $1.62 billion. Net income fell to $84.35 million from $120.28 million in the same quarter last year. Big Lots said that it will completely exit the Canadian market in the first quarter and losses in the fourth quarter were lower than expected. The company announced that it will add freezers and coolers to hundreds of stores given the fact that stores already equipped with refrigeration units out-performed other stores in the quarter. Shares surged 22.97 percent, closing at $35.97.
This morning, Foot Locker (NYSE: FL) reported its fourth quarter earnings. The company announced an EPS of $0.82, beating the consensus estimate of $0.76. Revenue of $1.79 billion beat the consensus estimate of $1.76 billion. Net income for the quarter rose to $121 million from 104 million in the same quarter last year aided by comparable-store sales rising 5.3 percent in the quarter and an expansion of its “shop-in-shops” concepts. The company is guiding for a double-digit percentage increase in EPS in 2014. Shares hit new 52 week highs of $46.80 before closing the day at $46.49, up 8.80 percent.
A mistrial has been declared in Juniper Networks' (NASDAQ: JNPR) infringement suit against Palo Alto Networks (NADAQ: PANW) Shares of Juniper lost 0.64 percent, closing at $26.27 while Palo Alto surged 10.90 percent, closing at $77.02.
After pricing its IPO at $16, Coupons.com (NASDAQ: COUP) opened at $27.15 and closed the day at at $30.00, up 87.50 percent. Shares traded as high as $33.00 in the afternoon.
Decliners of Note
NewLink Genetics (NASDAQ: NLNK) announced that it will discontinue the phase 3 IMPRESS clinical trial of algenpantucel-L for patients with pancreatic cancer. The company intends to regroup and “gathering additional, more mature data in support of our mission to provide improved treatment options for patients with pancreatic cancer.” Shares fell 16.20 percent, closing at $31.60.
FireEye (NASDAQ: FEYE) has priced a secondary offering of 14 million shares of its common stock at $82 per share. Shares traded as high as $97.35 on March 5. 5.6 million shares are being offered by FireEye and the remaining shares are being offered by shareholders. FireEye is expecting to raise around $460 million. The company has previously hinted that its near term strategy is to focus on growth and not profitability. Shares lost 9.50 percent, closing at $81.04.
Earnings of Note
Last night, QIHOO 360 (NYSE: QIHU [FREE Stock Trend Analysis]) reported its fourth quarter results. The company announced an EPS of $0.70, beating the consensus estimate of $0.43. Revenue of $221.6 million beat the consensus estimate of $209.73 million. Net income rose to $16.6 million from $12.8 million in the same quarter last year. Daily unique browser home page visitors averaged 119 million, up 28 million year over year but down seven million from the previous quarter. Home page daily clicks averaged 681 million, up 231 million year over year but remained relatively flat from the previous quarter. Online ad revenue rose 113 percent year over year to $142.2 million, more than a growth rate of 107 percent the company saw in the previous quarter. Qihoo issued guidance and sees its first quarter revenue to be $226 million to $228 million, above the consensus estimate of $203 million. Shares hit new 52 week highs of $124.42 before reversing gains and closing the day at $120.79, down 0.61 percent.
Quote of the Day
“I do expect that growth will be strong enough to lead to continued improvement in labor market conditions. I must caution, however, that the outlook for the unemployment rate is unusually uncertain. If our assessment is correct, at some point an improving labor market should cause the labor force participation rate to stabilize or rise a bit as currently discouraged workers begin looking for work. Such developments could result in a more muted rate of decline of the unemployment rate despite the faster growth.” – The Fed's Bill Dudley speaking in Brooklyn, New York today.
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