Market Wrap For March 14: Ukraine Tension Drag Markets Lower
U.S. stocks declined as concerns escalated over Ukraine, two days before its citizens will vote in a referendum to split from Ukraine and become part of Russia.
Russian President Vladimir Putin is gearing up to “invade eastern Ukraine” as a six hour talk between U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov proved futile. Lavrov said that there is no “common vision” on resolving the crisis.
- The Dow lost 0.26 percent, closing at 16,067.40.
- The S&P 500 lost 0.28 percent, closing at 1,841.13.
- The Nasdaq lost 0.35 percent, closing at 4,245.40.
- Gold gained 0.79 percent, trading at $1,383.20 an ounce.
- Oil gained 0.91 percent, trading at $99.09 a barrel.
- Silver gained 1.38 percent, trading at $21.49 an ounce.
News of Note
Producer Price Index declined 0.1 percent, worse than the 0.2 percent gain expected.
Core PPI declined 0.2 percent, worse than the 0.1 percent gain expected.
March Reuters/UofM Consumer Sentiment read 79.9, below expectations of 81.8.
Analyst Upgrades and Downgrades of Note
Analysts at Sterne Agee initiated coverage of Alcoa (NYSE: AA) with a Buy rating and $15 price target. Shares lost 0.17 percent, closing at $11.84.
Analysts at SunTrust Robinson Humphrey initiated coverage of Allscripts Healthcare Solutions (NASDAQ: MDRX) with a Buy rating and $22.50 price target. Shares hit new 52 week highs of $19.37 before closing the day at $19.07, up 1.65 percent.
Analysts at Longbow Research initiated coverage of Domino's Pizza (NYSE: DPZ) with a Buy rating and $99 price target. Shares gained 0.77 percent, closing at $79.52.
Analysts at Morgan Stanley maintained an Overweight rating on Freeport McMoRan (NYSE: FCX) with an Overweight rating and a price target lowered to $40 from a previous $43. Shares gained 1.37 percent, closing at $31.06.
Analysts at Oppenheimer maintained an Outperform rating on Home Depot (NYSE: HD) with a price target increased to $93 from a previous $86. Shares gained 0.70 percent, closing at $79.35.
Analysts at Oppenheimer upgraded Lowe's Companies (NYSE: LOW) to Outperform from Market Perform with a price target raised to $57 from a previous $50.
Analysts at Goldman Sachs upgraded NuStar Energy (NYSE: NS) to Buy from Neutral with a price target raised to $62 from a previous $49. Shares gained 0.74 percent, closing at $49.07.
Analysts at Morgan Stanley maintained an Overweight rating on Pfizer (NYSE: PFE) with a price target raised to $36 from a previous $34. Shares gained 0.32 percent, closing at $31.22.
Analysts at Cowen & Company downgraded Plug Power (NASDAQ: PLUG) to Market Perform from Outperform with a price target raised to $7.50 from a previous $5.50. Separately, analysts at Roth Capital downgraded Plug Power to Neutral from Buy with a price target raised to $8 from a previous $0.80. Shares fell 16.12 percent, closing at $6.71.
Analysts at Morgan Stanley upgraded Teva Pharmaceuticals (NASDAQ: TEVA) to Equal-weight from Underweight with a $52 price target. Shares gained 1.92 percent, closing at $48.88.
Analysts at Credit Suisse downgraded United States Steel (NYSE: X) to Underperform from Neutral with a $19 price target. Shares lost 1.45 percent, closing at $24.05.
Equities-Specific News of Note
According to the New York Post, auto dealers in New York are pressing state lawmakers to ban direct sales of cars. New York could become the sixths state whose legislation will effectively ban or limit direct sales of Tesla Motors (NASDAQ: TSLA). Shares lost 2.87 percent, closing at $230.97.
Nelson Peltz wrote a letter to PepsiCo's (NYSE: PEP) calling on the company to "provide shareholders with analytical support for PepsiCo's continued reliance on the “Power of One” strategy and its rejection of Trian's recommendation to separate global snacks and beverages into two independent public companies." Shares lost 0.98 percent, closing at $81.00.
Vodafone (NYSE: VOD) is close to an agreement to acquire Grupo Corporativo ONO for 7.2 billion euros. Shares lost 0.59 percent, closing at $36.98.
At the request of the Department of Justice and Securities and Exchange Commission, Cisco (NASDAQ: CSCO) has started an investigation into bribery allegations relating to its operations in Russia. Shares lost 0.79 percent, closing at $21.35.
SolarCity (NASDAQ: SCTY) is teaming up with KirE builders to offer solar power to all homes in KirE's Black Canyon Estates that will open this weekend. Shares lost 0.39 percent, closing at $73.79.
A review of federal crash data from an automotive watchdog group found that 303 deaths of drivers and front-seat passengers were caused by airbags that did not deploy in recalled General Motors (NYSE: GM) vehicles. Shares gained 0.89 percent, closing at $34.09.
General Mills (NYSE: GIS) reaffirmed its prior guidance of fiscal 2014 EPS of $2.87 to $2.90. Sales and operating profit for the third quarter may come in one percent lower reflecting a drop in volume. The company will report its third quarter results on March 19 with a conference call scheduled at 8:30 AM ET. Shares lost 2.41 percent, closing at $49.78.
Alibaba is reportedly preparing for a U.S. IPO as soon as next month. The deal is significant to Yahoo! (NASDAQ: YAHOO) who maintains a 24 percent stake in the Chinese company. Shares of Yahoo! gained 0.99 percent, closing at $37.60.
Clayton Williams Energy (NYSE: CWEI) said that it has sold its Austin Chalk and Eagle Ford shale wells for $71 million to an unnamed buyer. Shares lost 0.22 percent, closing at $91.19.
Citron Research issued a report detailing its views that Questcor's (NASDAQ: QCOR) H.P Achtar Gel's specific active ingredient is less than 20 percent of the label specification. Shares gained 2.53 percent, closing at $63.30.
According to a 13D filing, Kyle Bass' Hayman Capital disclosed a 4.76 million share ownership of Nationstar Mortgage (NYSE: NSM), or 5.3 percent of the company. Hayman Capital disclosed at the end of 2013 it owned 1.85 million shares. Shares gained 4.80 percent, closing at $32.77.
Salesforce.com (NYSE: CRM) added Colin Powell to its board of directors. Shares lost 1.52 percent, closing at $58.16.
ExxonMobil (NYSE: XOM) said that its PNG LNG liquefied natural gas project in Papua New Guinea should begin delivering gas by June, months ahead of schedule. The $19 billion plant will supply 6.9 million metric tons per year of liquefied natural gas to Japan, Taiwan and China. Shares lost 0.19 percent, closing at $93.46.
Idenix Pharmaceuticals (NASDAQ: IDIX) filed a patent infringement lawsuit against Gilead Sciences (NASDAQ: GILD) in several European countries. Idenix is seeking remedies relating to Gilead's commercial activities involving its drugs containing sofosbuvir. Shares of Idenix finished the day unchanged at $6.94 while Gilead lost 3.79 percent, closing at $75.05.
Winners of Note
Starbucks (NASDAQ: SBUX) and Keurig Green Mountain (NASDAQ: GMCR) announced that they have made changes to their five-year agreement. Starbucks will receive improved business terms in exchange for no longer using a previous exclusive use of “super-premium” coffee. Separately, Keurig announced a new multi-year agreement with Peet's Coffee & Tea to launch a variety of new K-Cups. Shares of Starbucks were little moved on the news announcement, losing 0.21 percent, closing at $74.27 while shares of Keurig Green Mountain gained 6.68 percent, closing at $113.25.
Liberty Media (NASDAQ: LMCA) announced it will create two new tracking stocks. The first will be known as ‘Liberty Media' with the other ‘Liberty Broadband.' Investors will receive one share of Liberty Media and four shares of Liberty Broadband for every share of Liberty currently owned. The shareholders will also receive a subscription right to acquire one additional series A or series B share of Liberty Broadband tracking stock for every five shares of series A or five shares of series B Liberty Broadband tracking stock at a 20 percent discount to the 20 day volume weighted average trading price. The company also announced that its offer to acquire Sirius XM Holdings (NASDAQ: SIRI) is no longer applicable, but the company remains enthusiastic over its already existing 53 percent holding of Sirius. Separately, Sirius confirmed it will resume its stock purchase program following Liberty Media pulling out its acquisition offer. Shares of Liberty Media gained 7.22 percent, closing at $135.25 while Sirius gained 2.08 percent, closing at $3.44.
Decliners of Note
Cowen Research took to Twitter with Aeropostale's (NYSE: ARO) “new $150MM senior secured credit commitment now supersedes equity shareholders in the capital structure.” Shares closed at new 52 week lows of $5.83, down 20.14 percent.
On no new news FuelCell (NASDAQ: FCEL) declined today. The move can be seen as investors locking in profits, or investors reacting to the two downgrades that hit Plug Power (NASDAQ: PLUG) today. Shares of FuelCell lost 9.31 percent, closing at $3.02.
Earnings of Note
This morning, Cooper Tire & Rubber (NYSE: CTB) reported its fourth quarter results. The company announced an EPS of $0.31, beating the consensus estimate of $0.26. Revenue of $861 million beat the consensus estimate of $772.32. Net income for the quarter fell to $20 million from $73 million in the same quarter last year as volume of tires sold was lower both domestically and internationally. The company noted that it had a reduced impact from its Apollo Tyres merger in the quarter than it did in the preceding one. Shares gained 6.75 percent, closing at $24.36.
This morning, ANN (NYSE: ANN) reported its fourth quarter results. The company announced an EPS of $0.10, beating the consensus estimate of $0.07. Revenue of $623.3 million was in-line with the consensus estimate. Comparable-store sales rose 2.9 percent in the quarter as net income nearly doubled to $4.7 million from $2.4 million in the same quarter last year. ANN announced that it will realign the company to better position itself for growth by increasing its focus on improving and creating omni-channel capabilities. Shares gained 7.57 percent, closing at $37.51.
Quote of the Day
"Do not rely on decoupling. Do not rely on central bank liquidity. Do not reply on hope. Hope is a false friend in these markets” – Albert Edwards, Societe General's “uber-bearish” strategist in comments made today.
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