Market Wrap For March 24: Markets On Two-Day Losing Streak?
U.S. stocks declined for the second straight session on little market-moving news.
The Nasdaq index was hit harder than other major indices with investors and traders selling off otherwise solid performers like Facebook, Google, Tesla, Keurig Green Mountain and others.
"These are all stocks that have had enormous gains over the last year; those are high-valuation stocks, and when you talk about a risk-off trade where people are withdrawing capital from riskier areas, that where people pull from first, stocks that have had significant run ups," Matthew Kaufler of Federated Investors told CNBC.
- The Dow Jones lost 0.16 percent, closing at 16,276.69.
- The S&P 500 lost 0.49 percent, closing at 1,857.44.
- The Nadsaq lost 1.18 percent, closing at 4,226.39.
- Gold lost 1.95 percent, trading at $1,309.90 an ounce.
- Oil lost 0.10 percent, trading at $99.36 a barrel.
- Silver lost 1.70 percent, trading at $19.97 an ounce.
News of Note
February Chicago Fed National Activity Index increased to +0.14 in February from -0.45 in January.
HSBC Chinese flash manufacturing PMI declined to 48.1 in March from 48.5 in February, missing the consensus of 48.7. This would mark the fifth consecutive decline in the index.
Eurozone flash manufacturing PMI fell to 53 in March from 53.2 in February, missing the consensus of 53.2.
Analyst Upgrades and Downgrades of Note
Analysts at Morgan Stanley maintained an Overweight rating on American Airlines (NYSE: AAL) with a price target raised to $45 from a previous $43. Shares gained 1.91 percent, closing at $36.80.
Analysts at Atlantic Securities downgraded Bank of America (NYSE: BAC) to Neutral from Overweight. Shares lost 1.08 percent, closing at $17.37.
Analysts at Cormark Securities upgraded BlackBerry (NASDAQ: BBRY) to Speculative Buy from Market Perform. Shares gained 2.18 percent, closing at $9.38.
Analysts at Nomura maintained a Buy rating on Celgene (NASDAQ: CELG) with a price target raised to $248 from a previous $241. Shares lost 2.06 percent, closing a $141.42.
Analysts at UBS maintained a Buy rating on Comcast (NASDAQ: CMCSA) with a price target of $58. Shares gained 0.60 percent, closing at $50.30.
Analysts at UBS maintained a Neutral rating on Darden Restaurants (NYSE: DRI) with a price target of $51. Shares gained 0.06 percent, closing at $50.69.
Analysts at Wedbush maintained an Outperform rating on Electronic Arts (NYSE: EA) with a price target raised to $37 from a previous $30. Shares lost 2.52 percent, closing at $29.00.
Analysts at CRT Capital maintained a Fair Value rating of iRobot (NASDAQ: IRBT) with a price target raised to $40 from a previous $30. Shares lost 2.40 percent, closing at $41.05.
Analysts at Deutsche Bank downgraded Loews (NYSE: L) to Hold from Buy with a price target lowered to $51 from a previous $53. Shares lost 1.40 percent, closing at $43.61.
Analysts at JPMorgan downgraded LinnCo (NASDAQ: LNCO) to Neutral from Overweight. Shares lost 5.25 percent, closing at $26.71.
Analysts at JPMorgan downgraded Linn Energy (NASDAQ: LINE) to Neutral from Overweight. Shares lost 4.17 percent, closing at $27.78.
Analysts at UBS maintained a Neutral rating of Lululemon Athletica (NASDAQ: LULU) with a price target of $46. Shares gained 3.51 percent, closing at $49.30.
Analysts at Deutsche Bank maintained a Buy rating on Qualcomm (NASDAQ: QCOM) with a price target raised to $86 from a previous $78. Shares lost 0.58 percent, closing at $77.74.
Analysts at JPMorgan upgraded Stratasys (NASDAQ: SSYS) to Overweight from Neutral with a price target of $125. Shares gained 0.65 percent, trading at $107.14.
Analysts at Goldman Sachs downgraded Tifanny & Co. to Buy from Conviction Buy with a price target lowered to $100 from a previous $101. Shares lost 3.87 percent, closing at $87.21.
Analysts at Sterne Agee upgraded VMware (NYSE: VMW) to Buy from Neutral with a price target raised to $126 from a previous $97. Shares lost 0.47 percent, closing at $108.70.
Analysts at JMP Securities upgraded Yelp (NASDAQ: YELP) to Market Outperform from Market Perform with a price target of $113. Shares lost 2.77 percent, closing at $81.12.
Equities-Specific News of Note
Apple (NASDAQ: AAPL) and Comcast (NASDAQ: CMCSA) are discussing a service that would allow users to watch live TV in addition to receive on-demand TV programming. Recordings on a potential device could also be done and stored on a cloud server. The device would compose of Apple's set-top box and would receive special treatment over the “last mile” on Comcast's networks to maximize download speed. Shares of Apple gained 1.17 percent, closing at $539.10 while shares of Comcast gained 0.60 percent, closing at $50.30.
Cisco (NASDAQ: CSCO) announced that it plans to invest $1 billion over the next two years on a cloud computing service. Shares lost 0.32 percent, closing at $21.57.
Lions Gate's (NYSE: LGF) newest flick Divergent collected $56 million in the box office despite the film receiving mixed reviews last week. Shares gained 3.84 percent, closing at $28.66.
Nabors Industries (NYSE: NBR) said that it expects its first quarter earnings to fall below consensus estimates of $0.20. Shares hit new 52 week highs of $24.21 before closing the day at $24.05, up 2.02 percent.
Schlumberger's (NYSE: SLB) CEO is projecting the company's first quarter earnings to be much higher than what was recorded in the same quarter last year. Shares gained 0.62 percent, closing at $93.24.
In a 10-K filing, J.C. Penney (NYSE: JCP) noted that its legal battle with Macy's over Martha Stewart will not have a material adverse effect on its results. Shares of J.C. Penney gained 1.24 percent, closing at $8.60.
David Winters of Wintergreen advisers sent a letter to Coca-Cola's (NYSE: KO) board, shareholders and Warren Buffet to protest the company's 2014 equity plan for top executives which Winters believes will dilute shares by around 14.2 percent. Coca-Cola responded by saying that its executive compensation plan is linked to specific business goals and not a transfer of wealth from shareholders to management.
Palo Alto Networks (NASDAQ: PANW) announced that it will acquire Israeli based cybersecurity startup Cyvera for $200 million. Shares lost 4.35 percent, closing at $73.23.
Winners of Note
Chinese regulatory officials have finalized a review of the Nu Skin's (NYSE: NUS) business practices in the country which have been labeled as illegal and a pyramid scheme. The Chinese regulatory body has fined Nu Skin $524,000 for unauthorized direct sales of certain products and $16,000 for product claims which failed to be supported with sufficient documentary support. Six employees were also fined collectively $241,000 for promotional activity which was deemed unauthorized. Nu Skin was also requested by the Chinese authorities to take steps to correct the issues in addition to enhancing the education and supervision of its sales representatives. Shares gained 18.21 percent, closing at $88.66.
Herbalife (NYSE: HLF) announced that three Carl Icahn supporters have been nominated to the company's Board. The three are Hunter Gary, Jesse Lynn and James Nelson. Carl Icahn, whose firm Icahn Enterprises maintains a 17 percent stake in the company stated this morning that “we remain resolute in our commitment to the long-term success of Herbalife” and that his representatives “will enhance value” at the company. Shares gained 6.70 percent, closing at $52.86.
Decliners of Note
Shares of Netflix (NASDAQ: NFLX) sold off following Apple and Comcast streaming TV talks were revealed. A combination of the largest tech company (by market cap) and the largest cable provider in the U.S. could prove to be a stiff competition for Netflix. Shares lost 6.67 percent, closing at $378.90.
58.com (NASDAQ: WUBA) announced that it will issue four million new shares and sell four million shares on behalf of existing holders. Shares lost 7.07 percent, closing at $43.00.
Quote of the Day
"[Coca-Cola] expects that the 2014 plan will award a mix of 60 percent options, 40 percent full value shares, resulting in the issuance of 340,000,000 Coca-Cola shares. At the current share price, these shares would be worth approximately $13 billion. In effect, the board is asking shareholders for approval to transfer approximately $13 billion from all of our pockets to the company's management over the next four years." - David Winters on Coca-Cola's management compensation plans.
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