Markets Virtually Flat, Oil Continues To Decline Following Bearish Outlook
U.S. markets were little changed to start the week as equities took a back seat following a bearish oil call at Goldman Sachs.
Analysts at Goldman Sachs placed a $75-per-barrel target on crude oil, noting that supply will outpace demand in the coming year.
The National Association of Realtors reported this morning that existing home sales rose less than expected in September from August.
The CBOE Volatility Index rose 2.2 percent to 16.47.
Looking forward to the week ahead, the FOMC will meet on Tuesday with a statement expected Wednesday at 2:00 p.m ET.
- The Dow gained 0.07 percent, closing at 16,817.94.
- The S&P 500 lost 0.15 percent, closing at 1,961.63.
- The Nasdaq gained 0.05 percent, closing at 4,485.93.
- Gold lost 0.32 percent, trading at $1,227.80 an ounce.
- Oil lost 0.65 percent, trading at $79.92 a barrel.
- Silver lost 0.33 percent, trading at $17.12 an ounce.
News Of Note
October U.S. PMI Services Index fell to 57.3 (preliminary versus expectations of 58) from 58.5 in September.
September Pending Homes Sales rose 0.3 percent (versus expectations of 0.5 percent) to 105.
Germany's business confidence index fell to 103.2 in October from 104.7 in September.
Analyst Upgrades And Downgrades Of Note
Analysts at Deutsche Bank upgraded Alcoa (NYSE: AA) to Buy from Hold with a price target raised to $20 from a previous $16. Shares lost 1.03 percent, closing at $16.38.
Analysts at Morgan Stanley maintained an Overweight rating on Delphi Automotive (NYSE: DLPH) with a price target raised to $90 from a previous $85. Shares gained 0.10 percent, closing at $66.85.
Analysts at Longbow Research upgraded DineEquity (NYSE: DIN) to Buy from Neutral with a $102 price target. Shares hit new 52-week highs of $86.02 before closing the day at $85.15, up 1.49 percent.
Analysts at Monness Crespi Hardt initiated coverage of Facebook (NASDAQ: FB) with a Buy rating and $95 price target. Shares lost 0.48 percent, closing at $80.28.
Analysts at Credit Suisse maintained a Neutral rating on Ford Motor (NYSE: F) with a price target lowered to $13.50 from a previous $15.50. Analysts at Barclays maintained an Equal-Weight rating with a price target lowered to $16 from a previous $17. Shares gained 0.29 percent, closing at $13.82.
Analysts at Monness Crespi Hardt initiated coverage of Google (NASDAQ: GOOG) with a Neutral rating and $605 price target. Shares gained 0.18 percent, closing at $540.77.
Analysts at CRT Capital maintained a Buy rating on Shire (NASDAQ: SHPG) with a price target raised to $233 from a previous $225. Shares gained 0.71 percent, closing at $195.87.
Equities-Specific News Of Note
Rite Aid (NYSE: RAD) and CVS Caremark (NYSE: CVS) have both disabled customers ability to make purchases with Apple's (NASDAQ: AAPL) mobile wallet system, Apple Pay. Shares of Rite Aid gained 0.84 percent, closing at $4.80 while share of CVS hit new 52-week highs of $85.22 before closing the day at $84.84. Shares lost 0.10 percent, closing at $105.11.
Amazon.com (NASDAQ: AMZN) released a Fire TV Stick that provides Wi-Fi access to web video sources for $39. Shares gained 1.01 percent, closing at $289.97.
Valeant Pharmaceuticals' (NYSE: VRX) CEO Michael Pearson wrote a letter to Allergan's (NYSE: AGN) board of directors saying that he could raise his offer to acquire the company to at least $200 per share. Shares of Valeant gained 1.11 percent, closing at $130.56, while shares of Allergan lost 1.02 percent, closing at $172.33.
Micron (NASDAQ: MU) announced a $1 billion share buyback authorization. Shares gained 3.99 percent, closing at $32.30.
Winners Of Note
NQ Mobile (NYSE: NQ) released its 2013 Form 20-F confirming that its audited financial results “contain no adverse findings and are consistent with the Company's previous financial disclosures and reports.” Shares gained 5.82 percent, closing at $9.46.
Novavax (NASDAQ: NVAX) said that it plans to begin a Phase 1 clinical trial of its Ebola vaccine as early as December. Shares gained 13.06 percent, closing at $5.80.
Decliners Of Note
Sarepta Therapeutics (NASDAQ: SRPT) said that the FDA would require additional data concerning the company's eteplirsen NDA including an independent assessment of dystrophin images as well as additional details over a minimum duration of safety in new patients exposed to eteplirsen. The company remains confident it will submit the NDA by the middle of next year. Shares plunged 32.47 percent, closing at $15.91.
According to Bloomberg, major banks including JPMorgan have put off syndicating $3.19 billion of loans for Scientific Games (NASDAQ: SGMS) that would have been used to finance its acquisition of Bally Technologies (NYSE: BYI). Shares of Scientific Games lost 6.56 percent, closing at $9.26 while shares of Bally Technologies lost 2.07 percent, closing at $77.97.
Tesla's (NASDAQ: TSLA) sales have dropped 26 percent year over year in September, according to WardsAuto.com. Shares lost 5.72 percent, closing at $221.79.
Earnings Of Note
Huntsman (NYSE: HUN) reported its third quarter results this morning. The company earned $0.60 per share, beating the consensus estimate of $0.54. Revenue of $2.88 billion missed the consensus estimate of $2.91 billion. Shares lost 5.67 percent, closing at $23.11.
Allergan (NYSE: AGN) reported its third quarter results this morning. The company earned $1.78 per share, beating the consensus estimate of $1.68. Revenue of $1.79 billion beat the consensus estimate of $1.78 billion. Shares lost 1.02 percent, closing at $182.33.
Merck & Company (NYSE: MRK) reported its third quarter results this morning. The company earned $0.90 per share, beating the consensus estimate of $0.88. Revenue of $10.60 billion missed the consensus estimate of $10.68 billion. Shares lost 2.01 percent, closing at $56.45.
Buffalo Wild Wings (NASDAQ: BWLD) reported its third quarter results after the market closed. The company earned $1.14 per share, beating the consensus estimate of $1.07. Revenue of $117.0 million beat the consensus estimate of $115.39 million. Shares were trading higher by 6.11 percent at $142.00 following its earnings release.
Twitter (NYSE: TWTR) reported its third quarter results after the market closed. The company earned $0.01 per share, in-line with the consensus estimate. Revenue of $360.0 million beat the consensus estimate of $351.32 million. Shares were trading lower by 9.35 percent at $44.02 following its earnings release.
Quote Of The Day
"While large shifts in positioning precipitated a sell-off in oil prices that far exceeded the actual weakening in fundamentals, our confidence in a 2015 oversupplied global oil market has increased. As a result, we are bringing forward our medium-term bearish oil outlook. We now forecast that prices will need to decline further in 2015 as (1) accelerating non-OPEC production growth outside North America will outpace demand growth, leaving the oil market oversupplied, (2) the scale and sustainability of US shale oil production is driving the global cost curve lower and sustaining cost deflation, and (3) OPEC will no longer act as the first-mover swing producer and that US shale oil output will be called upon to fill this role." - Jeffrey Currie of Goldman Sachs in a note downgrading oil-related companies while placing a $75-per-barrel forecast for crude oil.
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