Market Wrap For April 7: Bears In Complete Control As Markets Get Hammered Yet Again
U.S. stocks declined for the third straight day in another trading session in which Internet, social media, biotechnology and momentum stocks sold off.
The Dow suffered another triple-digit point loss while the three major indices each saw declines greater than one percent.
The timing of the three day losing streak has come at a difficult time as Tuesday marks the unofficial begin to the quarterly earnings season.
- The Dow lost 1.02 percent, closing at 16,245.87.
- The S&P 500 lost 1.08 percent, closing at 1,845.04.
- The Nasdaq lost 1.16 percent, closing at 4,079.75.
- Gold lost 0.49 percent, trading at $1,297.10 an ounce.
- Oil lost 0.58 percent, trading at $100.55 a barrel.
- Silver lost 0.28 percent, trading at $19.89 an ounce.
News of Note
February Consumer Credit rose to $16.49 billion from $13.8 billion, ahead of the $14.0 billion consensus.
Elections are underway in India. The voting process consists of nine rounds taking place over five weeks.
Nigeria is now Africa's largest economy after the country altered the way it calculates its GDP.
Analyst Upgrades and Downgrades of Note
Analysts at Deutsche Bank upgraded Alcoa (NYSE: AA) to Hold from Sell with a price target raised to $10 from a previous $7.50. Shares lost 1.27 percent, closing at $12.47.
Analysts at Goldman Sachs initiated coverage of American Airlines (NYSE: AAL) with a Buy rating and $46 price target. Shares lost 2.13 percent, closing at $35.78.
Analysts at Cowen & Company downgraded American Eagle (NYSE: AEO) to Underperform from Market Perform with a price target lowered to $11 from a previous $14. Shares hit new 52 week lows of $11.60 before closing the day at $11.67, down 7.97 percent.
Analysts at Citigroup maintained a Neutral rating on Ameriprise Financial (NYSE: AMP) with a price target raised to $120 from a previous $117. Shares lost 3.43 percent, closing at $107.60.
Analysts at HSBC upgraded Citigroup (NYSE: C) to Neutral from Underweight with a price target raised to $51 from a previous $48. Shares lost 1.21 percent, closing at $46.54.
Analysts at Raymond James downgraded D.R. Horton (NYSE: DHI) to Underperform from Market Perform. Shares lost 2.42 percent, closing at $21.77.
Analysts at FBN Securities initiated coverage of FireEye (NASDAQ: FEYE) with an Outperform rating and $65 price target. Shares lost 0.02 percent, closing at $50.35.
Analysts at Standpoint Research upgraded General Motors (NYSE: GM) to Buy from Hold. Shares lost 2.00 percent, closing at $34.12.
Analysts at Pacific Crest upgraded Intel (NASDAQ: INTC) to Outperform from Sector Perform with a $31 price target. Shares gained 1.24 percent, closing at $26.49.
Analysts at Deutsche Bank maintained a Buy rating on Kroger Company (NYSE: KR) with a price target raised to $50 from a previous $46. Shares lost 1.20 percent, closing at $44.15.
Analysts at Oppenheimer upgraded Netflix (NASDAQ: NFLX) to Outperform from Perform. Shares gained 0.20 percent, closing at $338.00.
Analysts at Wedbush upgraded Pandora Media (NYSE: P) to Outperform from Neutral with a $35 price target. Shares lost 4.93 percent, closing at $27.00.
Analysts at Citigroup maintained a Buy rating on TJX Companies (NYSE: TJX) with a price target raised to $72 from a previous $68. Shares lost 2.12 percent, closing at $59.88.
Analysts at Wunderlich maintained a Hold rating on Time Warner Cable (NYSE: TWC) with a price target raised to $146 from a previous $138. Shares lost 2.11 percent, closing at $136.24.
Analysts at Sterne Agee upgraded Under Armour (NYSE: UA) to Buy from Neutral with a $125 price target. Shares lost 1.76 percent, closing at $102.49.
Analysts at Citigroup maintained a Neutral rating on ING U.S (a.k.a Voya Financial) (NYSE: VOYA) with a price target raised to $41 from a previous $39. Shares lost 2.17 percent, closing at $36.01.
Analysts at Citigroup maintained a Neutral rating on Wells Fargo & Company (NYSE: WFC) with a price target raised to $53 from a previous $50. Shares lost 1.82 percent, closing at $48.66.
Analysts at Oppenheimer upgraded Yelp (NASDAQ: YELP) to Outperform from Perform. Shares gained 0.35 percent, closing at $65.99.
Analysts at Wedbush reiterating an Outperform rating while adding Zynga (NASDAQ: ZNGA) to its ‘Best Ideas List' with a $7 price target. Shares lost 0.24 percent, closing at $4.19.
Equities-Specific News of Note
Potash's (NYSE: POT) CEO Bill Doyle will step down in July and be replaced with Jochen Tilk who recently served as the head of Inmet Mining, which was acquired by First Quantum Minerals for C$4.9 billion in 2013. Shares lost 1.89 percent, closing at $33.81.
Yahoo! (NASDAQ: YHOO) is considering entering the online video entertainment space by ordering four TV series consisting of half-hour episodes. Meanwhile, Microsoft (NASDAQ: MSFT) announced that it will create its own original comedy shows produced by its Xbox studios unit. Shares of Yahoo! lost 3.47 percent, closing at $33.07 while shares of Microsoft lost 0.18 percent, closing at $39.80.
Teva Pharmaceuticals (NASDAQ: TEVA) is lobbying the Supreme Court to overrule a lower court ruling which would allow generic Copaxone makers to launch their products as soon as May. Shares lost 2.75 percent, closing at $51.54.
Yum Brands (NYSE: YUM) opened a new concept restaurant in Texas that could rival Chick-fil-A with a hand breaded chicken sandwich. Shares lost 0.28 percent, closing at $75.23.
Cnooc (NYSE: CEO) is considering selling its 50 percent stake in Argentina's Briads Corp which the Chinese company bought for $3.1 billion in 2010. Shares gained 0.85 percent closing at $157.00.
Pfizer (NYSE: PFE) announced that its Palbociclib treatment doubled progress-free survival to 20.2 months during a Phase II trial of patients with advanced breast cancer. Shares lost 2.99 percent, closing at $31.20.
Winners of Note
Questcor Pharmaceuticals (NASDAQ: QCOR) has been acquired for $5.6 billion by Mallincrodt. (NYSE: MNK) Questcor shareholders will receive $30 in cash per share plus 0.897 shares of Mallincrodt stock, valuing the deal slightly above the $86.00 mark. Questcor will operate as a separate entity within Mellincrodt's Specialty Pharmaceuticals division. Shares of Questcor soared to new 52 week highs of $89.30 before closing the day at $80.58, up 18.73 percent.
Agios Pharmaceuticals (NASDAQ: AGIO) announced that six out of seven patients has seen an objective improvement in their condition during a Phase I trial of its AG-221 treatment for leukemia. Three patients had seen complete responses, two patients had seen complete remissions with incomplete platelet recovery and one patient has seen a partial response. Shares gained 27.82 percent, closing at $45.35.
Decliners of Note
The FDA announced that its review of MannKind's (NASDAQ: MNKD) diabetes treatment named Afrezza will take until July 15. Investors had previously speculated that an announcement would be made on April 15. Last week, the FDA panel recommended that Afrezza be approved as a means for patients to establish glycemic control. Shares lost 8.01 percent, closing at $6.32.
The Shareholders Foundation has initiated a lawsuit against SolarCity (NASDAQ: SCTY) on behalf of some of the company's shareholders who allege the company is in violation of Federal Securities laws. Specifically, the lawsuit is focusing on the company's announcement on March 18 that previous financial statements should no longer be relied upon. As noted in the filling, "The plaintiff claims that that the defendants made allegedly false and/or misleading statements and/or failed to disclose that SolarCity Corp lacked adequate controls over financial reporting, that SolarCity Corp misclassified its reported expenses, that... SolarCity Corp's financial statements were materially false and misleading at all relevant times," said the Shareholders Foundation.” Shares lost 8.09 percent, closing at $54.30.
World Wrestling Entertainment (NYSE: WWE) announced that 667,287 subscribers had signed up for its WWE Network since it went live on February 24. Some analysts had hoped for a number closer to the one million mark while the company is guided towards the one million mark within the next year. Shares lost 14.70 percent, closing at $23.90.
Quote of the Day
“I watched the Samsung pre-superbowl ad that launched today. It's pretty good and I can't help but think ‘these guys are feeling it' (like an athlete who can't miss because they are in a zone) while we struggle to nail a compelling brief on iPhone. That's sad because we have much better products.” -Apple's Marketing head Phil Schiller in an e-mail to ad executives dated February 1, 2013
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