U.S. stocks continued to sell off on Friday on higher than usual volume.
Semiconductor stocks were hit hard following Microchip's profit warning and cautious sector-wide comments. The rest of the tech sector was weak, especially "momentum" and high-beta stocks as the Nasdaq index noticeably underperformed the S&P 500 and Dow indices.
Shares of the iPath S&P 500 VIX ST Futures ETN soared 11.30 percent on Friday, making it one of the best performing ETFs for the week.
- The Dow lost 0.69 percent, closing at 16,544.10.
- The S&P 500 lost 1.15 percent, closing at 1,906.13.
- The Nasdaq lost 2.33 percent, closing at 4,276.24.
- Gold lost 0.16 percent, trading at $1,223.30 an ounce.
- Oil lost 0.23 percent, trading at $85.57 a barrel.
- Silver lost 0.28 percent, trading at $17.37 an ounce.
News Of Note
September Import Prices fell 0.5 percent month over month (versus expectations of a 0.8 percent decline) after declining 0.6 percent in August.
September Export Prices fell 0.2 percent month over month (versus expectations of a 0.1 percent decline) after declining 0.5 percent in August.
OPEC maintained their guidance of global oil demand growth at 1.05 million barrels per day in 2014 and 1.19 million barrels per day in 2015.
Analyst Upgrades And Downgrades Of Note
Analysts at Tigress Financial upgraded Alcoa AA to Strong Buy from Buy. Shares lost 4.42 percent, closing at $14.71.
Analysts at Susquehanna maintained a Positive rating on Amazon.com AMZN with a price target lowered to $390 from a previous $400. Shares lost 1.26 percent, closing at $311.39.
Analysts at Buckingham Research maintained an Underperform rating on Buffalo Wild Wings BWLD with a price target lowered to $114 from a previous $116. Also, analysts at BMO Capital Markets initiated coverage of Buffalo Wild Wings with an Outperform rating and $165 price target. Shares lost 0.31 percent, closing at $123.74.
Analysts at BMO Capital Markets initiated coverage of Chipotle Mexican Grill CMG with a Market Perform rating and $720 price target. Shares lost 0.76 percent, closing at $655.58.
Analysts at Bank of America maintained a Buy rating on Coca-Cola KO with a price target raised to $48 from a previous $45. Shares hit new 52-week highs of $44.87 before closing the day at $44.47, up 1.37 percent.
Analysts at Jefferies initiated coverage of EMC EMC with a Buy rating and $37 price target. Shares lost 1.44 percent, closing at $27.98.
Analysts at Benchmark upgraded Electronic Arts EA to Buy from Hold. Shares lost 1.37 percent, closing at $34.53.
Analysts at Susquehanna maintained a Positive rating on Facebook FB with a price target raised to $88 from a previous $84. Shares lost 3.95 percent, closing at $72.91.
Analysts at Susquehanna maintained a Positive rating on Google GOOG with a price target lowered to $660 from a previous $700. Shares lost 2.92 percent, closing at $544.51.
Analysts at Evercore Partners downgraded Groupon GRPN to Sell from Equal-Weight while maintaining a $5.50 price target. Shares lost 6.90 percent, closing at $5.94.
Analysts at Summit Research maintained a Hold rating on Intel INTC with a price target raised to $31 from a previous $27.50. Shares lost 5.09 percent, closing at $31.91.
Analysts at Susquehanna maintained a Positive rating on LinkedIn LNKD with a price target raised to $240 from a previous $220. Shares lost 3.84 percent, closing at $194.23.
Analysts at Deutsche Bank maintained a Buy rating on PepsiCo PEP with a price target raised to $102 from a previous $100. Also, analysts at Credit Suisse maintained a Neutral rating on Pepsi with a price target raised to $95 from a previous $92. Shares gained 1.15 percent, closing at $94.65.
Analysts at Northland Securities maintained a Buy rating on Salesforce.com CRM with a price target raised to $70 from a previous $65. Shares lost 4.13 percent, closing at $54.77.
Analysts at Jefferies upgraded T Mobile U.S. TMUS to Buy from Hold with a price target raised to $35 from a previous $30. Shares lost 2.75 percent, closing at $27.61.
Analysts at Susquehanna maintained a Neutral rating on Twitter TWTR with a price target raised to $47 from a previous $45. Shares lost 8.84 percent, closing at $50.40.
Analysts at Tigress Financial initiated coverage of United Technologies UTX with a Buy rating. Shares finished the day unchanged at $99.94.
Analysts at Gilford Securities upgraded Wal-Mart WMT to Buy from Neutral. Shares gained 0.55 percent, closing at $78.29.
Equities-Specific News Of Note
Bloomberg first reported that Blackstone BX plans to spin off its financial advisory division. The company confirmed that it will spin off the division to a new publicly-traded firm. Blackstone holders will own around 65 percent of the new company. Shares lost 0.57 percent, closing at $29.60.
General Motors GM stated that its sales in China rose 15.2 percent from a year ago at 319,936 vehicles. Shares lost 2.38 percent, closing at $30.29.
Starboard Value won all 12 seats on Darden Restaurants DRI board of directors following a vote at the company's annual investor meeting. Shares lost 1.83 percent, closing at $48.37.
Baidu BIDU acquired a majority stake in Brazil's largest daily deal site named Peixe Urbano for an undisclosed sum. Shares lost 4.53 percent, closing at $203.34.
Nokia NOK finalized a deal with China Mobile CHL to provide $970 million worth of hardware, software and services through 2015. Shares of Nokia lost 1.86 percent, closing at $7.90 while shares of China Mobile lost 3.02 percent, closing at $58.43.
21st Century Fox FOXA and Apollo Global APO announced they will jointly create a new media group with a 50/50 ownership split. Shares of 21st Century Fox lost 2.05 percent, closing at $32.43 while shares of Apollo Global lost 3.55 percent, closing at $22.01.
Winners Of Note
Exact Sciences EXAS received Medicare coverage for Cologuard last night. Cologuard screens patients for colorectal cancer, and now Medicare Part B will cover the costs for beneficiaries who qualify. Shares surged to new 52-week highs of $26.79 before closing the day at $24.60, up 35.76 percent.
Level-3 Communications LLL revised its second quarter numbers in a 10-Q filling and stated that it identified weaknesses in internal controls over its financial reporting. The company showed a total pretax income revisions of $140 million and sales revision to $73 million. Shares gained 6.51 percent, closing at $115.15.
Decliners Of Note
Tesla Motors TSLA unveiled last night a duel-motor Model S sedan that can accelerate from 0-60mph in 3.2 seconds. The car can travel 275 miles on a fully-charged battery and includes auto pilot features such as self-parking. The company will began shipping the car in December. Shares lost 7.82 percent, closing at $236.91 as reaction toward the vehicle came in mixed.
Last night Microchip MCHP issued second quarter downside guidance. The company said that it expects its revenue to be $546.2 million, below prior guidance of $560 million to $567.9 million. Perhaps more alarming were the cements from the company's CEO Steve Sanghi who said “we believe that another industry correction has begun and that this correction will be seen more broadly across the industry in the near future.” Shares lost 12.26 percent, closing at $39.96.
Symantec SYMC announced last night that it plans to split itself in to two companies. The first company will offer security software and services while the second company will offer storage management software and services. The split will be structured as a tax-free spinoff and is expected to finalize by the end of 2015. Analysts at Topeka warned investors: "While the split may appease some, it remains to be seen if either, or both, company can begin to generate top-line revenue growth. Conditions may be a bit awkward until the separation is complete, which is likely to take place in 2HF16." Shares lost 6.37 percent, closing at $21.95.
Manitowoc Company MTW issued downside third quarter guidance and expects its EBITDA to be around $90 million compared to $112.4 million in the same quarter a year ago. Net sales are projected to be just under $1 billion, down from $1.01 billion a year ago. The company said that its crane segment will see revenues decline by mid-to-high single-digit percentage point from a year ago while operating margins will be around 7 percent. The company's food service segment is expected to see revenues rise by a low-to-mid single-digit percentage point with operating margins around 15 percent. Shares hit new 52-week lows of $17.72 before closing the day at $18.76, down 12.87 percent.
Juniper Networks JNPR issued downside third quarter guidance last night and expects its third quarter revenue to be $1.11 billion to $1.12 billion, lower than the company's prior guidance of $1.15 billion to $1.28 billion. The company also lowered its earnings per share guidance to $0.34 from $0.36 from a previous range of $0.35 to $0.40. The company blamed its downside guidance on a “lower-than-anticipated demand from service providers, particularly in the U.S.” Shares lost 9.07 percent, closing at $19.04.
Earnings Of Note
Fastenal Company FAST reported its third quarter results this morning. The company announced an EPS of $0.45, in line with the consensus estimate. Revenue of $980.80 million beat the consensus estimate of $980.10 million. Net earnings for the quarter rose to $375.8 million from $349.41 million in the same quarter a year ago, as the company saw its total average daily sales growth rate higher by 14.3 percent compared to 5.3 percent a year ago. However, gross margins declined by 90 basis points year over year to 50.8 percent (lower than the company's long-term guidance of 51 percent to 53 percent) due to an unfavorable sales mix. Shares hit new 52-week lows of $41.82 before closing the day at $42.54, down 4.83 percent.
Progressive PGR reported its third quarter results this morning. The company announced an EPS of $0.50, beating the consensus estimate of $0.43. Revenue of $4.73 billion beat the consensus estimate of $4.70 billion. Net income for the quarter rose to $296.1 million from $232.4 million in the same quarter a year ago as the company saw its combined ratio (percentage of premiums paid out as claims and expenses) improve 170 basis points from a year ago to 92.5 percent. Shares lost 1.07 percent, closing at $25.00.
Quote Of The Day
"Toward the end of the interview, Maria asked me what advice I would offer women who are not comfortable asking for pay raises. I answered that question completely wrong. Without a doubt I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap. I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it's deserved, Maria's advice was the right advice. If you think you deserve a raise, you should just ask." - Microsoft CEO Satya Nadella retracting controversial comments he made regarding women's pay in the workforce.
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