Market Wrap For March 31: Stocks Rally As Yellen Confirms Support For Economy
U.S. stocks rose in the final day of the first quarter as the Fed's boss Janet Yellen said there is still room for the central bank to further boost the economy.
Yellen, speaking in Chicago today, said the scars from the Great Recession remain, and reaching our goals will take time." Yellen further emphasized and said there remains an "overall commitment to maintain extraordinary support for the recovery for some time to come."
- The Dow gained 0.82 percent, closing at 16,457.66.
- The S&P 500 gained 0.79 percent, closing at 1,872.34.
- The Nasdaq gained 1.04 percent, closing at 4,198.89.
- Gold lost 0.83 percent, trading at $1,283.00 an ounce.
- Oil lost 0.22 percent, trading at $101.45 a barrel.
- Silver lost 0.08 percent, trading at $19.81 an ounce.
News of Note
March Chicago PMI read 55.9, below the 59.0 consensus and a prior reading of 59.8.
March Dallas Fed Manufacturing Outlook read 4.9, ahead of expectations of 3.0 and a prior reading of 0.3.
Russian Prime Minister Dmitry Medvedev is leading a delegation of ministers to Crimea, thereby becoming the most senior official from Russia to visit the region since it was annexed by Russia.
Japanese industrial output fell 2.3 percent in February after rising 3.8 percent in January. Analysts were expecting a growth of 0.3 percent.
Eurozone flash inflation fell 0.5 percent year over year in March. Core CPI dipped to +0.8 percent from +1.0 percent.
Analyst Upgrades and Downgrades of Note
Analysts at Credit Suisse downgraded BlackBerry (NASDAQ: BBRY) to Underperform from Neutral with a price target lowered to $6 from a previous $7. Separately, analysts at Needham upgraded BlackBerry to Hold from Underperform. Shares lost 3.92 percent, closing at $8.08.
Analysts at KeyBanc upgraded Big Lots (NYSE: BIG) to Buy from Hold with a price target of $45. Shares gained 1.75 percent, closing at $37.85.
Analysts at Barclays maintained an Overweight rating on Berkshire Hathaway (NYSE: BRK/A) with a price target raised to $216K from a previous $205.5K. Shares gained 1.16 percent, closing at $187.3K.
Analysts at Barclays maintained an Overweight rating on Caterpillar (NYSE: CAT) with a price target raised to $112 from a previous $107. Shares hit new 52 week highs of $100.63 before closing the day at $99.37, down 0.02 percent.
Analysts at Bank of America maintained an Underperform rating on 3D Systems (NYSE: DDD) with a price target lowered to $55 from a previous $65. Shares gained 0.22 percent, closing at $59.20.
Analysts at Wedbush upgraded Lululemon Athletica (NASDAQ: LULU) to Outperform from Neutral with a price target raised to $64 from a previous $54. Shares gained 1.35 percent, closing at $52.59.
Analysts at Mizuho Securities upgraded Men's Wearhouse (NYSE: MW) to Buy from Neutral with a price target of $60. Shares gained 1.07 percent, closing at $48.92.
Analysts at Wedbush upgraded Panera Bread (NASDAQ: PNRA) to Outperform from Neutral with a price target raised to $215 from a previous $185. Shares gained 1.42 percent, closing at $176.47.
Analysts at Deutsche Bank downgraded Safeway (NYSE: SWY) to Hold from Buy with a price target of $40. Shares lost 0.94 percent, closing at $36.95.
Analysts at UBS maintained a Neutral rating on Teva Pharmaceuticals (NASDAQ: TEVA) with a price target raised to $50 from a previous $40. Shares hit new 52 week highs of $52.75 before closing the day at $52.81, up 6.84 percent.
Analysts at Goldman Sachs upgraded Vipshop Holdings (NASDAQ: VIPS) to Buy from Neutral with a price target of $185. Shares gained 7.67 percent, closing at $148.59.
Analysts at Goldman Sachs upgraded ING U.S. (NASDAQ: VOYA) to Buy from Neutral with a price target raised to $43 from a previous $38. Shares gained 1.94 percent, closing at $36.18.
Analysts at Wells Fargo initiated coverage of Yelp (NASDAQ: YELP) with a Market Perform rating. Shares gained 0.41 percent, closing at $76.75.
Equities-Specific News of Note
Tesla's (NASDAQ: TSLA) Chinese general manager, Kingston Chang, has parted ways with the company. There was no official reason for the departure. Shares lost 1.86 percent, closing at $208.43.
Jazz Pharmaceuticals' (NASDAQ: JAZZ) Defitelio officially launched in Germany and Autsria with a roll-out to continue in 27 European countries throughout 2014 and 2015. Shares gained 3.91 percent, closing at $138.68.
Jury selection begins today in Apple's (NASDAQ: AAPL) $2 billion claim that Samsung (OTC: SSNLF) violated five of Apple patents. Samsung argues that Apple has breached two of their own patents. Shares of Apple lost 0.02 percent, closing at $536.74.
Johnson & Johnson (NYSE: JNJ) officially accepted Carlyle Group's (NYSE: CG) $4.15 billion offer for its Ortho-Clinical Diagnostics business which as proposed in January. Shares of Johnson & Johnson hit new 52 week highs of $98.60 before closing the day at $98.23, up 0.81 percent. Shares of Carlyle Group gained 2.45 percent, closing at $35.14
According to Comcast's (NASDAQ: CMCSA) CFO Michael Angelakis, the company is considering adding $2.5 billion in share buybacks to its current repurchase plan. Shares gained 0.97 percent, closing at $50.054.
MGM Resorts' (NYSE: MGM) chairman James Murren expects the company to open a casino in Japan before the 2020 Tokyo Olympics Games. Shares gained 3.94 percent, closing at $25.86.
Microsoft's (NASDAQ: MSFT) Phil Spencer will now head up the company's Xbox unit and will report to OS chief Terry Myerson and not Stephen Elop. Shares hit new 52 week highs of $41.50 before closing the day at $40.99, up 1.71 percent.
ING Groep's (NYSE: ING) CEO Ralph Hamers commented that the company could pay out dividends to shareholders after its government bailout has been fully repaid by no later than May 2015. Shares gained 3.86 percent, closing at $14.25.
Melco Crown (NASDAQ: MPEL) revealed that it plans to pay investors a semi-annual dividend of approximately 20 percent of the company's annual consolidated net income attributable to shareholders in addition to a special dividend. Shares gained 3.18 percent, closing at $38.65.
Twitter (NYSE: TWTR) purchased SecondSync, a start-up that provides analytics for TV-related social media activity. Separately, Twitter hired Philippe Dauman Jr to be its director of commerce partnerships. Dauman Jr is the son of Viacom's CEO and will be leaving his position at Google to join the social media company. Shares lost 1.33 percent, closing at $46.67.
EOG Resources (NYSE: EOG) said that five new wells in Texas' Eagle Ford Shale were pumping the equivalent of more than 13,00 barrels of crude a day. Shares hit new 52 week highs of $199.50 before closing the day at $196.17, down 0.50 percent.
According to analysts at Pacific Crest, Baidu (NASDAQ: BIDU) will forecast a strong first quarter due to its online video advertising pricing. Shares gained 1.07 percent, closing at $152.27.
Edwards Lifesciences' (NYSE: EW) Sapien XT heart valve outperformed a rival device made by Medtronic (NYSE: MDT) in a comparison of 241 patients. Shares of Edwards Lifesciences gained 4.23 percent, closing at $74.17 while Medtronic hit new 52 week highs of $61.74 before closing the day at $61.54, up 1.87 percent.
Winners of Note
BioFuel Energy (NASDAQ: BIOF) received a $275 million buyout offer on Friday from Greenlight Capital and JBGL Funds to acquire the 64.5 percent of the company that they do not already own. Shares surged to new 52 week highs of $7.78 before closing the day at $7.30, up 132.48 percent.
Energous (NASDAQ: WATT) continues to see strong buying momentum following its Friday IPO. Investors appear to continue to be attracted to the fact that the company is developing WattUp, a wire-free charging technology in which users could charge their wireless devices through Wi-Fi and no longer through wires or a charging station. Shares hit new 52 week highs of $16.00 before closing the day at $14.75, up 39.41 percent.
Wix.com (NASDAQ: WIX) withdrew a shelf offering due to “adverse market conditions.” The company announced on March 20 a proposed public offering of ordinary shares by it and certain selling shareholders. Shares gained 9.28 percent, closing at $22.97.
Decliners of Note
According to Analysts at Summer Street, an FDA panel tomorrow will vote to not approve MannKind's (NASDAQ: MNKD) inhaled insulin Afrezza. According to the analysts there are several surprises in the 240 page briefing document. Shares lost 16.77 percent, closing at $4.02.
The Supreme Court has agreed to hear an appeal by Teva Pharmaceuticals over a court ruling that would enable generic versions of its multiple sceloris drug Copaxone to begin selling in May. If the court ruling is upheld, competitors such as Momental Pharmanceuticals (NASDAQ: MNTA) could launch its generic version of the drug in May. Analysts at BMO Capital noted that it is unlikely a generic version of Copaxone would be launched in May which could explain the sell off in Momental as shares lost 16.85 percent, closing at $11.65.
Quote of the Day
“Ok, I just read Janet's speech in Chicago today. Holy dovish deepdish pizza batman!! I have no recollection of a Fed Chair's speech where the lives of three down-on-their-luck job seeking individuals were discussed in detail. This is one loving and caring Fed Chair – I must send her a “no haters” hat immediately! If anyone doubts Janet's commitment to fighting for more job creation – read the tape. If anyone doubts Janet's belief that there is excessive slack in labor markets – read the tape. And if anyone doubt's Janet conviction that there are no material inflation risks on the horizon – read the tape. This could be one of the most dovish speeches I have ever read from a Federal Reserve official! Janet has quickly redeemed her poor performance from 12 days ago. On this assignment she gets an A+. Somehow I always knew she would pull through.” – David Zervos, chief market strategist at Jefferies.
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