Market Wrap For May 27: S&P 500 Closes At New Record High After Holiday Weekend
U.S. stocks rose on a light volume trading session following a three day weekend.
Regardless, the S&P 500 index hit a new intraday all time high of 1,912.28.
Tuesday's trading session saw the release of mostly positive economic data including durable goods and the S&P/Case-Shiller Index.
- The Dow gained 0.42 percent, closing at 16,675.50.
- The S&P 500 gained 0.60 percent, closing at 1,911.91.
- The Nasdaq gained 1.22 percent, closing at 4,237.07.
- Gold lost 2.02 percent, trading at $1,265.60 an ounce.
- Oil lost 0.21 percent, trading at $104.13 a barrel.
- Silver lost 1.71 percent, trading at $19.08 an ounce.
News of Note
April Durable Goods rose 0.8 percent after rising 3.6 percent in March. Analysts were expecting a decline of 0.8 percent in April.
S&P Case-Shiller Home Price Index rose 0.9 percent month over month in March after rising 0.8 percent in February and topping expectations for a gain of 0.7 percent.
March FHFA Housing Price Index rose 0.7 percent after rising 0.6 percent in February and topping expectations for a gain of 0.5 percent.
U.S. May PMI Services Index Flash rose to 58.4 from 55.0 in April, topping expectations of 55.4.
May Consumer Confidence rose to 83.0 from 82.3 in April, topping expectations of 82.3.
May Richmond Fed Manufacturing Survey remained unchanged at plus-seven from April but still topped expectations of plus-five.
May Dallas Fed Manufacturing Outlook declined to plus-eight from +11.7 in April and missed expectations of +9.6.
Petro Poroshenko, Ukraine's newly elected president, said that he is ready to open dialogue with Moscow.
Analyst Upgrades and Downgrades of Note
Analysts at Goldman Sachs initiated coverage of Aegerion Pharmaceuticals (NASDAQ: AEGR) with a Sell rating and $27 price target. Shares gained 2.12 percent, closing at $32.33.
Analysts at Deutsche Bank maintained a Buy rating on Big Lots (NYSE: BIG) with a price target raised to $42 from a previous $40. Shares lost 1.61 percent, closing at $37.36.
Analysts at UBS maintained a Buy rating on Footlocker (NYSE: FL) with a price target raised to $54 from a previous $51. Shares lost 1.00 percent, closing at $48.43.
Analysts at Cantor Fitzgerald maintained a Hold rating on Jazz Pharmaceutical (NASDAQ: JAZZ) with a price target lowered to $151 from a previous $182. Shares gained 5.13 percent, closing at $142.32.
Analysts at Canaccord Genuity maintained a Buy rating on Nokia (NYSE: NOK) with a price target raised to $11 from a previous $10.25. Shares gained 0.26 percent, closing at $7.86.
Analysts at Goldman Sachs upgraded Office Depot (NYSE: ODP) to Buy from Neutral with a price target raised to $7 from a previous $5.40. Shares gained 2.58 percent, closing at $5.17.
Analysts at Goldman Sachs downgraded Staples (NASDAQ: SPLS) to Sell from Neutral with a price target lowered to $11 from a previous $11.50. Shares lost 1.97 percent, closing at $11.42.
Analysts at Macquarie maintained an Outperform rating on T-Mobile U.S. (NASDAQ: TMUS) with a price target raised to $38 from a previous $37. Shares hit new 52-week highs of $34.34 before closing the day at $34.32, up 1.06 percent.
Analysts at B. Riley maintained a Neutral rating on Workday (NASDAQ: WDAY) with a price target lowered to $82 from a previous $107. Shares gained 4.89 percent, closing at $82.13.
Analysts at HSBC upgraded Youku (NYSE: YOKU) to Neutral from Underweight with an unchanged price target of $22. Shares lost 1.67 percent, closing at $19.97.
Equities-Specific News of Note
Starbucks (NASDAQ: SBUX) will open a new concept restaurant La Boulange which will serve dinner until 10 PM and feature the bakery's assortment of items such as sandwiches, salads, omelets in addition to croissant burgers, beer and other alcohol beverages. Shares gained 2.33 percent, closing at $73.66.
Proxy firm ISS said that it believes Wal-Mart (NYSE: WMT) needs more independent directors on its board and would support a resolution calling for the chairman of the board to be an independent. Shares lost 0.07 percent, closing at $75.56.
Exxon (NYSE: XOM) announced it had successfully began shipping liquefied natural gas from its PNG LNG project in Papua New Guinea ahead of schedule. Shares gained 0.04 percent, closing at $101.36.
Noodles (NASDAQ: NDLS) will acquire 16 franchised locations from Sagamore Dining Partner for around $13.4 million. Shares gained 0.21 percent, closing at $33.22.
Intuit (NASDAQ: INTU) has acquired Check, a bill payment and monitoring app with ten million users for $360 million in cash and other considerations. Shares gained 0.68 percent, closing at $80.13.
Intel (NASDAQ: INTC) will team up with Chinese chipmaker Rockhip to develop a baseband/app processor. Shares gained 1.60 percent, closing at $26.71.
Bank of America (NYSE: BAC) resubmitted its capital plan to the Fed which noted that the accounting error previously disclosed by the bank had a less than one basis point reduction on its regulatory capital ratios for the period ended September 30, 2013 and no effect on the ratio for the period ending March 31, 2014. Shares gained 3.40 percent, closing at $15.22.
Twitter (NYSE: TWTR) entered a $230 million, two-year deal with Omnicom to integrate Omnicom's programmatic ad buying unit Accuen with Twitter's previously acquired ad exchange MoPub. Shares gained 0.03 percent, closing at $30.51.
Apollo Global (NYSE: APO) will offer $300 million in ten-year notes. Shares gained 1.09 percent, closing at $24.98.
Allergan (NYSE: AGN) released a 20 page investor presentation titled “Certain Potential Business Risks And Issues With Valeant Pharmaceuticals International. (NYSE: VRX) Shares of Allergan lost 1.14 percent, closing at $165.02 while shares of Valeant lost 2.63 percent, closing at $129.95.
InterContinental Hotels (NYSE: IHG) rejected a £6 billion takeover offer from U.S. hotel chain, citing the offer is too low. Shares hit new 52-week highs of $39.25 before closing the day at $38.74, up 2.98 percent.
Toyota (NYSE: TM) announced that it has no plans to build new plants for the next two years. Shares gained 0.43 percent, closing at $110.11.
Winners of Note
Pilgrim's Pride offered to acquire Hillshire Brands (NYSE: HSH) for $45 per share. Pilgrim's Pride said that the proposed takeover offer would void Hillshire's merger agreement with Pinnacle Foods. Hillshire said in a statement that “We continue to strongly believe in the strategic merits and value creation potential provided by the proposed transaction with Pinnacle Foods. Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, Hillshire Brands' Board will thoroughly review the Pilgrim's Pride proposal." Shares of Pilgrim's Pride hit new 52-week highs of $26.87, up 1.67 percent while shares of Hillshire surged to new 52-week highs of $45.52 before closing the day at $45.19, up 22.07 percent.
Aeropostale (NYSE: ARO) secured a $150 million credit facility from Sycamore Partners, a private equity firm that already owns nearly eight percent of the firm. Sycamore's director Stefan Kaluzny has been named to Aeropostale's board of directors along with Aeropostale's former CEO Julian Geiger. Shares gained 14.96 percent, closing at $3.92.
Decliners of Note
As reported in the Winners of Note, Pilgrim Pride's offer to acquire Hillshire Brands would void Hillshire's offer to acquire Pinnacle Foods (NYSE: PF). Shares of Pinnacle Foods lost 5.38 percent, closing at $31.48.
Earnings of Note
This morning, AutoZone (NYSE: AZO) reported its third quarter results. The company announced an EPS of $8.46, beating the consensus estimate of $8.45. Revenue of $2.34 billion was in-line with the consensus estimate Net income for the quarter rose to $285.2 million from $265.58 million in the same quarter a year ago as the company's inventory per store rose 12 percent from a year ago to $594,000. As such, the company's gross profit rate improved 20 bps to 52.0 percent due to a higher merchandise margins and lower shrink expense. Operating expense rose 40 bps to 31.5 percent due to higher store payroll. Despite the fact that AutoZone's third quarter marked the thirty-first consecutive quarter of double digit earnings per share growth shares lost 3.82 percent, closing at $520.25.
This morning, JinkoSolar Holding (NYSE: JKS) reported its first quarter results. The company announced an EPS of $0.20, missing the consensus estimate of $0.40. Revenue of $323.9 million beat the consensus estimate of $288.65 million. Net income for the quarter rose to RMB9.5 million ($1.5 million) from a net loss of RMB128.7 million in the same quarter a year ago despite a 0.9 percent in total solar product shipments from the previous quarter. Gross margin for the quarter also declined to 24.0 percent from 24.7 percent in the first quarter but compares favorably to the 12.7 percent the company saw last year. JinkoSolar expects its second quarter total solar module shipments to be 570 MW to 600 MW and for the full year fiscal 2014 the company expects its total solar module shipments to be 2.3 GW to 2.5 GW. Shares lost 3.02 percent, closing at $25.08.
After the market closed, Workday (NASDAQ: WDAY) reported its first quarter results. The company announced an EPS of -$0.13, beating the consensus estimate of -$0.15. Revenue of $159.7 million beat the consensus estimate of $152.42 million. Shares were trading higher by 4.91 percent at $86.16 following the earnings release.
Quote of the Day
"Blue Horseshoe loves Anacott Steel." - Bud Fox in the 1987 film Wall Street.
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