Market Wrap For June 13: Despite Rising, Dow And S&P 500 Lower For The Week
U.S. stocks closed the day slightly higher to close out the week as investor concerns over escalating violence in Iraq remains.
As was the case during the height of the Russia and Ukraine confrontation, investors are hesitant of holding on to investments over the weekend. U.S. Secretary of State John Kerry said that President Obama will make "timely decisions" on Iraq.
Despite closing the day in positive territory, the S&P 500 and Dow Jones indices ended the week lower than where they started on Monday.
- The Dow gained 0.25 percent, closing at 16,775.74.
- The S&P 500 gained 0.31 percent, closing at 1,936.05.
- The Nasdaq gained 0.30 percent, closing at 4,310.65.
- Gold gained 0.21 percent, trading at $1,276.70 an ounce.
- Oil gained 0.33 percent, trading at $106.88 a barrel.
- Silver gained 0.83 percent, trading at $19.69 an ounce.
News of Note
May Producer Price Index declined 0.2 percent month over month, worse than the 0.1 percent gain expected.
May Core PPI declined 0.1 percent month over month, worse than the 0.1 percent gain expected.
June Reuters/UofM Consumer Sentiment fell to 81.2 (preliminary) from 81.9 in May. Analysts were expecting a reading of 83.
Analyst Upgrades and Downgrades of Note
Analysts at Raymond James maintained an Outperform rating on Apple (NASDAQ: AAPL) with a price target raised to $102 from a previous $86. Shares lost 1.09 percent, closing at $91.28.
Analysts at Raymond James maintained an Outperform rating on CONSOL Energy (NYSE: CNX) with a price target raised to $53 from a previous $50. Also, analysts at UBS maintained a Neutral rating on Consol Energy with a price target raised to $47 from a previous $45. Shares gained 2.83 percent, closing at $46.09.
Analysts at Jefferies initiated coverage of ConocoPhillips (NYSE: COP) with a Hold rating and $89 price target. Shares gained 0.27 percent, closing at $83.08.
Analysts at Roth Capital initiated coverage of Fusion-io (NYSE: FIO) with a Buy rating and $12.50 price target. Shares gained 5.10 percent, closing at $9.28.
Analysts at Morgan Stanley upgraded Intel (NASDAQ: INTC) to Equal-weight from Underweight with a price target raised to $28 from a previous $24. Analysts at Roth Capital also upgraded Intel to Buy from Neutral with a price target raised to $35 from a previous $28 while analysts at Drexel Hamilton simply upgraded Intel to Buy from Hold. Analysts at JPMorgan maintained an Overweight rating on Intel with a price target raised to $31 from a previous $30 while analysts at Nomura maintained a Neutral rating with a price target raised to $27 from a previous $25. Shares hit new 52-week highs of $30.06 before closing the day at $29.87, up 6.83 percent.
Analysts at Jefferies initiated coverage of Occidental Petroleum (NYSE: OXY) with a Buy rating and $114 price target. Meanwhile, analysts at UBS maintained a Neutral rating on Occidental Petroleum with a price target raised to $107 from a previous $98. Shares hit new 52-week highs of $103.25 before closing the day at $103.23, up 1.96 percent.
Analysts at Credit Suisse upgraded Pinnacle Foods (NYSE: PF) to Outperform from Neutral. Shares gained 2.87 percent, closing at $33.04.
Analysts at DA Davidson downgraded Rackspace Hosting (NYSE: RAX) to Underperform from Neutral. Shares lost 1.35 percent, closing at $37.19.
Analysts at JPMorgan, Baird, and Wedbush all downgraded Lululemon Athletica (NASDAQ: LULU) to Neutral with price targets of $42 (from a previous $56), $40 (from a previous $60), $40 (from a previous $64) while analysts at Canaccord Genuity simply downgraded shares to Hold from Buy. Meanwhile, analysts at Morgan Stanley upgraded Lululemon to Equal-weight from Underweight with a price target raised to $28 from a previous $24. Also, analysts at KeyBanc maintained a Buy rating on Lululemon with a price target raised to $55 from a previous $73, as did Nomura who maintained a Buy rating with a price target lowered to $48 from a previous $55. Shares hit new 52-week lows before rebounding and closing the day in positive territory at $37.61, up 0.97 percent.
Analysts at CRT Capital initiated coverage of Zulili (NASDAQ: ZU) with a Fairly Valued valuation and $41 price target. Shares gained 5.10 percent, closing at $38.75.
Equities-Specific News of Note
BMW said that it met with Tesla Motors (NASDAQ: TSLA) executives earlier this week regarding a potential joint operation on electric cars. Shares of Tesla gained 1.42 percent, closing at $206.42.
Chevron (NYSE: CVX) sold its 25 percent interest in seven fields near Chad to the government of Chad for $1.3 billion. Shares gained 0.91 percent, closing at $127.26.
According to CNBC, Sprint (NYSE: S) and T-Mobile (NYSE: TMUS) have agreed on a $2 billion breakup fee. The two companies have also agreed the post-merger name of the combined entities will be T-Mobile. Shares of Sprint gained 1.63 percent, closing at $8.73 while shares of T-Mobile lost 0.33 percent, closing at $32.91.
General Electric (NYSE: GE) said that it will proceed with a bid to acquire Alstom without a partner. Shares gained 0.30 percent, closing at $27.04.
Bill Ackman's Pershing Square filed a lawsuit in Delaware court seeking confirmation that Allergan's (NYSE: AGN) rights plan is not triggered by efforts to call a special meeting and will not trigger Allergan's recently adopted poison pill. Shares lost 0.15 percent, closing at $161.79.
Winners of Note
Priceline Group (NASDAQ: PCLN) announced that it will acquire Open Table (NASDAQ: OPEN) for $2.6 billion or $103 per share in an all cash transaction. The deal represents a roughly 45 percent premium to Open Table's closing price on Thursday. “OpenTable is a great match for The Priceline Group. They provide us with a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience for our global customers," said Darren Huston, President & CEO of The Priceline Group. "We look forward to helping the OpenTable team accelerate their global expansion, increase the value offered to their restaurant partners, and enhance the end-to-end experience for our collective customers across desktop and mobile.” Shares of Priceline Group lost 2.99 percent, closing at $1,189.30 while shares of OpenTable surged to new 52-week highs of $104.77 before closing the day at $104.48, up 48.35 percent.
In a 13D filing, Sycamore Partners disclosed it holds a 9.9 percent ownership stake in Express (NASDAQ: EXPR) with the intention of performing a due diligence to determine the company's true valuation in order to submit a proposal to acquire the remaining stock not owned by Sycamore. Shares gained 21.40 percent, closing at $16.45.
After the market closed yesterday, Intel (NASDAQ: INTC) updated its guidance given a stronger than expected business PC Demand. The company revised its second quarter revenue guidance to a range of $13.4 billion to $14 billion from a previous range of $12.5 billion to $13.5 billion. The consensus estimate stands at $13 billion. Intel also said that it expects revenue growth for all of 2014 versus a previous guidance calling for sales to remain flat from a year ago. Shares hit new 52-week highs of $30.06 before closing the day at $29.87, up 6.83 percent.
Decliners of Note
Last night, Finisar (NASDAQ: FNSR) reported its fourth quarter results. The company announced an EPS of $0.36, missing the consensus estimate of $0.38. Revenue of $306 million beat the consensus estimate of $303.92 million. Net income for the quarter rose to $28.38 million from $27.06 million in the same quarter a year ago as gross margin improved 200 bps year over year to 34.2 percent, but down 300 bps from the previous quarter and below the company's guidance of 35.5 percent. Finisar issued guidance and sees its first quarter revenue to be in a range of $320 million to $335 million, above the consensus estimate of $371 million. However, the company guided its first quarter EPS to be in a range of $0.30 to $0.34, below the consensus estimate of $0.41. Shares lost 21.94 percent, closing at $19.71.
An International Trade Commission administrated law judge has ruled against InterDigital's (NASDAQ: IDCC) infringement case against Nokia. While the commission has yet to make a final ruling (which is due in October), shares of InterDigital lost 6.59 percent, closing at $45.06.
Quote of the Day
“Many market destinations are in the business of making markets. They provide liquidity, and revenue sharing is part of their business model. There exist today comprehensive regulations and oversight, disclosure and industry competition, as well as the many checks and balances we have implemented over the years, to ensure that we remain focused on satisfying our obligation to seek best execution on behalf of our clients. Without their trust and satisfaction we wouldn't have a business, and we could not maintain either of them if we didn't deliver on our promises to the best of our abilities.” – Fred Tomcyz, Chief Executive Officer of TD Ameritrade in a statement disclosing order routing and revenue information.
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