Market Wrap For March 11: Markets End Slightly In The Red As Ukraine Worries Persist And Continued Chinese Conerns
U.S. stocks declined as investors continue to question China's growth prospects following Monday's shocking report that its exports had tumbled in February.
Certainly not helping investor sentiment is the fact that Crimea's parliament voted to declare independence from Ukraine. This weekend, the citizens of Crimea will vote on a referendum to decide the matter.
- The Dow lost 0.41 percent, closing at 16,351.25.
- The S&P 500 lost 0.51 percent, closing at 1,867.63.
- The Nasdaq lost 0.63 percent, closing at 4,307.19.
- Gold gained 0.43 percent, trading at $1,347.30 an ounce.
- Oil lost 1.34 percent, trading at $99.77 a barrel.
- Silver lost 0.48 percent, trading at $20.81 an ounce.
News of Note
NFIB Small Business Optimism Index read 91.4, lower than the consensus of 94.0.
ICSC Retail Store Sales rose 1.3 percent week over week compared to a gain of 0.3 percent last week.
Redbook Chain Store Sales rose 2.5 percent year over year, compared to a growth of 2.9 percent last week.
January Wholesale Trade Inventories rose 0.6 percent to $521.2 billion, ahead of a consensus of 0.4 percent growth.
January Job Openings and Labor Turnover Survey (“JOLTS”) showed 3.974 million job openings, below a consensus of 4.0 million.
The Bank of Japan left its key interest rate unchanged at 0.1 percent and maintained its program of expanding the monetary base by ¥60 trillion to ¥70 trillion a year.
China announced it will allow the creation of five privately owned banks on a trial basis as part of the country's strategy to carry out economic reforms.
Analyst Upgrades and Downgrades of Note
Analysts at Pacific Crest upgraded Apple (NASDAQ: AAPL) to Outperform from Sector Perform with a price target of $635. Shares gained 0.97 percent, closing at $536.09.
Analysts at Nomura Maintained a Buy rating on Alexion Pharmaceuticals (NASDAQ: ALXN) with a price target raised to $222 from $214. Shares lost 2.25 percent, closing at $175.95.
Analysts at Buckingham Research initiated coverage of Aeropostale (NYSE: ARO) with a Buy rating and $11 price target. Shares gained 2.00 percent, closing at $7.14.
Analysts at Lake Street Capital downgraded Ballard Power Systems (NASDAQ: BLDP) to Hold from Buy with a price target raised to $4 from $3.60. Shares hit new 52 week highs of $8.38 before plunging 25.78 percent, closing at $5.10.
Analysts at Stephens & Co upgraded 3D Systems (NYSE: DDD) to Overweight from Equalweight with a price target of $77. Shares lost 2.85 percent, closing at $62.08.
Analysts at Citigroup maintained a Buy rating on Facebook (NASDAQ: FB) with a price target raised to $85 from a previous $70. Shares hit new 52 week highs of $72.59 before reversing gains and closing the day at $70.09, down 2.69 percent.
Analysts at Piper Jaffray downgraded FMC Corporation to Neutral from Overweight with a price target raised to $87 from a previous $81.
Analysts at Ascendiant Capital initiated coverage on Intel (NASDAQ: INTC) with a Sell rating and $20 price target. Shares lost 0.44 percent, closing at $24.73.
Analysts at Citigroup upgraded J.C. Penney (NYSE: JCP) to Buy from Neutral with a price target raised to $11 from a previous $7.50. Shares gained 2.97 percent, closing at $8.67.
Analysts at Morgan Stanley maintained an Equal-weight rating on Joy Global (NYSE: JOY) with a price target raised to $58 from a previous $54. Shares gained 0.51 percent, closing at $55.71.
Analysts at Wells Fargo upgraded Macy's (NYSE: M) to Outperform from Market Perform with a valuation range raised from $54 to $58 to $66 to $70. Shares hit new 52 week highs of $59.95 before closing the day at $58.93, up 1.39 percent.
Analysts at Longbow downgraded Panera Bread (NASDAQ: PNRA) to Neutral from Buy with no assigned price target. Shares lost 1.10 percent, closing at $183.00.
Analysts at Nomura maintained a Neutral rating on Urban Outfitters (NASDAQ: URBN) with a price target lowered to $39 from a previous $42. Shares lost 4.27 percent, closing at $35.91.
Analysts at Nomura maintained a Buy rating on VMware (NASDAQ: VMW) with a price target raised to $120 from a previous $110. Shares hit new 52 week highs of $106.46 before closing the day at $103.76, up 0.71 percent.
Equities-Specific News of Note
Men's Wearhouse confirmed that it finalized a deal to acquire Jos. A. Bank (NASDAQ: JOSB) for $65 per share, valuing the company at $1.8 billion. The boards of both companies offered a unanimous approval for the deal. Men's Wearhouse estimates it will see a benefit of $100 million to $150 million in annual run-rate synergies. Shares of Men's Wearhouse hit new 52 week highs of $58.80 before closing the day at $57.12, up 4.67 percent while Jos. A. Bank also hit new 52 week highs of $64.63 before closing the day at $64.22, up 3.87 percent.
Related: Men's Wearhouse To Acquire Jos. A Bank, Ending Months-Long Feud
Green Mountain Coffee Roasters (NASDAQ: GMCR) has officially changed its name to Keurig Green Mountain effective immediately. There will be no change to symbol GMCR. Shares gained 2.15 percent, closing at $106.23.
BHP Billiton (NYSE: BHP) is looking to sell its West African iron ore assets. Shares lost 1.63 percent, closing at $63.86.
GT Advanced Technologies (NASDAQ: GTAT) inked a $336 million deal to supply Cosmos Chemicals Berhad with technology and equipment to build a 25,0000 metric ton annual (MTA) polysilicon facility. Shares gained 1.00 percent, closing at $17.19.
Petrobras (NYSE: PBR) successfully sold $8.5 billion of bonds that were trading as much as 0.45 percentage points higher than existing bonds. Shares lost 1.31 percent, closing at $10.54.
According to Re/code, Jive Software (NASDAQ: JIVE) has explored a sale of the company during the last several months and has hired bankers to facilitate a sale. Shares gained 2.53 percent, closing at $8.52.
Freeport McMoRan (NYSE: FCX) has cut its ore production by approximately 60% at its Grasberg copper and gold mine in Indonesia. Shares lost 2.14 percent, closing at $30.71.
McDonald's (NYSE: MCD) executives speaking at a retail conference said that the company has an objective of stabilizing its performance in the U.S., Germany and Japan this year. The company also plans to return $5 billion to shareholders this year. Shares gained 3.76 percent, closing at $98.78.
At its annual analyst meeting, Chevron (NYSE: CVX) cut its 2017 production forecast to 3.1 million boe/day from previous guidance of 3.3 million boe/day. The company also sees $10 billion in asset divestment proceeds from 2014 to 2016. Shares lost 1.15 percent, closing at $114.51.
Target (NYSE: TGT) has been sued by Swatch for allegedly copying its watch designs in its “zebra” and “multi-color” watches. Shares lost 0.36 percent, closing at $60.94.
Twitter (NYSE: TWTR) has hired Baljeet Singh, a former YouTube executive responsible for implementing the site's skippable pre-roll video ads. Singh will work on improving Twitter's video discovery features and content base. Shares gained 0.26 percent, closing at $54.02.
Speaking on Fox Business Network, Starbucks' (NASDAQ: SBUX) CEO Howard Schultz said that the company has no plans to increase the prices of its coffee despite higher input costs. Additionally, Schultz hinted that he sees a “seismic shift” in mobile payments. Shares gained 2.00 percent, closing at $75.03.
Darden Restaurants (NYSE: DRI) has filed SEC paperwork relating to the separation of its Red Lobster chain. Shares gained 0.14 percent, closing at $50.15.
Shares of Herbalife (NYSE: HLF) were little changed following Bill Ackman's presentation on the company's alleged illegal pyramid scheme practices in China. Shares lost 1.16 percent, closing at $65.39.
New Jersey's Governor Chris Christie has banned direct sales of automobiles in the state forcing Tesla (NASDAQ: TSLA) to close its store and use dealers instead. Tesla said that “this is an affront to the very concept of a free market.” Shares lost 1.85 percent, closing at $234.41.
Winners of Note
Activist investor Elliott Management disclosed it owns a 5.38 million stake of Boyd Gaming (NYSE: BYD) representing approximately a five percent stake. The company also noted that it has “economic exposure to approximately 2.05% of the shares of Common Stock outstanding pursuant to Derivative Agreements.” Shares gained 16.53 percent, closing at $13.75
Decliners of Note
General Motors (NYSE: GM) will face a Congressional hearing and be forced to explain why the company took almost a decade to recall 1.6 million vehicles with defective ignition switches. Shares lost 5.15 percent, closing at $35.18.
Citron Research cautioned investors that Plug Power (NASDAQ: PLUG) investors should not trust management guidance which is set to be released on Thursday. Additionally, Plug Power sees the fair value of shares being $0.50. Citron's Andrew Left also argued that Plug Power has no unique technology. Shares hit new 52 week highs of $11.72 before plunging 41.51 percent, closing at $6.03
A Utah court has denied Myriad Genetics' (NASDAQ: MYGN) attempt to put a temporary stop to its rival Ambry Genetics' ability to market its BRCA 1 and BRCA 2 gene tests given what Myriad believes are patent infringements. The company noted that no further trial date has been scheduled. Shares lost 8.34 percent, closing at $34.60.
This morning, American Eagle Outfitters (NYSE: AEO) reported its fourth quarter results. The company announced an EPS of $0.27, beating the consensus estimate of $0.26. Revenue of $1.04 billion missed the consensus estimate of $1.05 billion. Gross profit fell 28 percent to $332 million and decreased 930 basis points to 31.9 percent as a rate to revenue from the same quarter a year ago as comparable sales fell seven percent year over year. American Eagle issued guidance and is forecasting its first quarter EPS will be break-even, below the consensus estimate of $0.13. Shares lost 7.81 percent, closing at $13.10.
Earnings of Note
This morning, Dick's Sporting Goods (NYSE: DKS) reported its fourth quarter results. The company announced an EPS of $1.11, in-line with the consensus estimate. Revenue of $1.95 billion beat the consensus estimate of $1.93 billion. Net income for the quarter rose to $138.6 million from $129.7 million in the same quarter last year as same store sales rose 7.9 percent in the quarter. Dick's Sporting Goods issued guidance and sees its first quarter EPS to be $0.51 to $0.53, below the consensus estimate of $0.54. For full year 2014, the company is projecting its EPS to be $3.03 to $3.08, below the consensus estimate of $3.11. Shares gained 4.31 percent, closing at $56.67.
After the closing bell, Caesars Entertainment (NYSE: CZR) reported its fourth quarter results. The company announced an EPS of -$12.83 which may not be comparable to the consensus estimate of -$1.49. Revenue of $2.07 billion missed the consensus estimate of $2.12 billion.
Shares were trading lower by 0.12 percent at $25.54 following the earnings release.
Quote of the Day
Conclusion: Plug Power in a Nutshell. No profits. No unique technology. No scalability. No demand. No brand equity. No media hype. No analyst support. And this business shows no signs of improvement, only the looming end of government subsidies. Does anyone ever really end up a winner at a casino???" - Citron Research in its in-depth negative research note on Plug Power
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