Markets Begin The Week On A Losing Note Ahead Of Earnings Kick-Off, Fed Minutes
U.S. stocks traded lower on Monday ahead of earnings season, which unofficially begins on Wednesday. The Federal Reserve will also release its minutes from its recent meeting on the same day.
Major indices were trading in positive territory on Monday with the Dow up as much as 89 points before reversing gains. The Volatility Index gained 5.3 percent, while the dollar fell against other worldwide currencies.
Investors found some positives in Hewlett-Packard Company's (NYSE: HPQ) decision to split itself into two companies, while Apple Inc's sapphire supplier GT Advanced Technologies surprised the Street by filing for bankruptcy.
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The Dow lost 0.10 percent, closing at 16,991.91.
The S&P 500 lost 0.16 percent, closing at 1,964.82.
The Nasdaq lost 0.47 percent, closing at 4,454.80.
Gold gained 1.19 percent, trading at $1,207.10 an ounce.
Oil gained 0.82 percent, trading at $90.48 a barrel.
Silver gained 2.82 percent, trading at $17.30 an ounce.
News Of Note
Gallup U.S. Consumer Spending fell to $87 in September from $94 in August.
Various media sources, including the New York Times, reported that Brazil's President Dilma Rousseff has emerged as a front-runner in Brazil's election but failed to win a majority of the vote, opening the way for a runoff with Aecio Neves, a pro-business politician.
Analyst Upgrades And Downgrades Of Note
Analysts at Piper Jaffray downgraded Abercrombie & Fitch (NYSE: ANF) to Neutral from Overweight with a price target lowered to $35 from a previous $45. Analysts at Mizuho Securities upgraded Abercrombie to Buy from Neutral with a price target raised to $45 from a previous $43. Shares lost 3.40 percent, closing at $34.64.
Analysts at Bank of America maintained a Buy rating on Anadarko Petroleum (NYSE: APC) with a price target raised to $135 from a previous $125. Shares lost 1.53 percent, closing at $97.19.
Analysts at Wedbush downgraded Buffalo Wild Wings (NASDAQ: BWLD) to Neutral from Outperform with a price target lowered to $135 from a previous $175. Shares lost 4.0 percent, closing at $131.62.
Analysts at Morgan Stanley upgraded Burger King Worldwide (NYSE: BKW) to Overweight from Equal-Weight with a price target of $38. Shares gained 0.96 percent, closing at $30.37.
Analysts at UBS upgraded ConocoPhillips (NYSE: COP) to Neutral from Sell. Shares gained 0.25 percent, closing at $74.96.
Analysts at Deutsche Bank maintained a Buy rating on Costco Wholesale Coporation (NASDAQ: COST) with a price target raised to $130 from a previous $128. Shares lost 0.69 percent, closing at $126.21.
Analysts at Piper Jaffray downgraded Deckers Outdoor (NASDAQ: DECK) to Neutral from Overweight with a price target lowered to $104 from a previous $114. Shares lost 6.27 percent, closing at $88.44.
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Analysts at Deutsche Bank maintained a Hold rating on Family Dollar (NYSE: FDO) with a price target lowered to $55 from a previous $59. Shares lost 0.61 percent, closing at $77.74.
Analysts at JMP Securities maintained an Outperform rating on GoPro (NASDAQ: GPRO) with a price target raised to $105 from a previous $60. Shares gained 7.74 percent, closing at $93.70.
Analysts at Goldman Sachs upgraded Intuitive Surgical (NASDAQ: ISRG) to Buy from Neutral with a price target raised to $584 from a previous $466. Shares gained 2.39 percent, closing at $486.55.
Analysts at Morgan Stanley downgraded McDonald's (NYSE: MCD) to Equal-Weight from Overweight with a price target lowered to $96 from a previous $102. Shares lost 1.08 percent, closing at $93.84.
Analysts at Raymond James downgraded Mobileye (NASDAQ: MBLY) to Market Perform from Outperform while removing a previous $49 price target. Shares lost 5.98 percent, closing at $54.25.
Analysts at JMP Securities maintained a Market Outperform rating on Morgan Stanley (NYSE: MS) with a price target raised to $38 from a previous $36. Shares lost 0.17 percent, closing at $34.99.
Analysts at Morgan Stanley reiterated an in-line rating on Wal-Mart (NYSE: WMT) with a price target lowered to $84 from a previous $87. Shares gained 0.04 percent, closing at $77.35.
Analysts at Deutsche Bank maintained a Buy rating on Walgreen Company (NYSE: WAG) with a price target lowered to $84 from a previous $87. Shares lost 0.20 percent, closing at $60.65.
Equities-Specific News Of Note
BHP Billiton (NYSE: BHP) plans to raise its iron ore capacity by around 30 percent with an objective of becoming the largest producer of iron ore in the world. Shares gained 1.28 percent, closing at $57.96.
Magnum Hunter Resources (NYSE: MHR) announced that it has successfully obtained two new credit facilities that will boost the company's liquidity by an estimated $115 million. Shares gained 3.49 percent, closing at $5.34.
Chevron (NYSE: CVX) plans to sell its 30-percent stake in the Duvernay shale for $1.5 billion to Kuwait Foreign Petroleum Exploration. Shares gained 0.32 percent, closing at $118.09.
Herbalife (NYSE: HLF) announced it hired Pamela Jones Harbour, a former FTC commissioner to assume the title of head of compliance. Shares gained 6.03 percent, closing at $47.30.
The National Basketball Association (NBA) finalized a long-term contract with both Walt Disney's (NYSE: DIS) ESPN and Time Warner's (NYSE: TWX) Turner Broadcasting through 2025. Shares of Disney gained 0.12 percent, closing at $88.56 while shares of Time Warner lost 1.20 percent, closing at $73.82.
Hewlett-Packard announced that it plans to separate itself into two publicly traded companies. The first company will be named Hewlett-Packard Enterprise and will focus on its enterprise technology infrastructure, software and services businesses. The second company will be named HP Inc and will focus on the company's personal systems and printers. Meg Whitman will assume top ranks of Hewlett-Packard enterprise and Dion Weisler will lead HP Inc. The spin-off is expected to be finalized by the end of fiscal 2015. Shares gained 4.74 percent, closing at $36.87.
Related Link: Hewlett-Packard Company: What The Technician Thinks
Conn's (NASDAQ: CONN) announced that it plans to explore strategic alternatives including a sale of the company, separating its retail and credit businesses, or slowing store openings in favor of returning capital to shareholders. The company has hired advisers from Bank of America but has not yet set a timetable. Conn's also initiated poison pill measures to prevent a hostile takeover of the company. Shares lost 0.79 percent, closing at $32.68.
Winners Of Note
Actavis (NYSE: ACT) announced that it has agreed to acquire Durata Therapeutics (NASDAQ: DRTX) for $675 million, or $23 per share. In addition, Durata shareholders may receive as much as $5 per share if certain Dalvance related regulatory milestones are successfully achieved. Actavis said that it expects the acquisition will be accretive by the end of the first year. Shares of Durata surged to new 52-week highs of $24.33 before closing the day at $24.24, up 74.64 percent; shares of Actavis were little changed to close the day at $243.95, down 0.86 percent.
According to Bloomberg, Glencore is planning a merger with Rio Tinto (NYSE: RIO) despite no talks being underway between the two companies. Shares of Rio Tinto gained 9.12 percent, closing at $51.47.
Decliners Of Note
Shares of GT Advanced Technologies (NASDAQ: GTAT) were halted shortly after the market opened. The company announced that it has “commenced voluntary cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Hampshire.” The company noted that it held $85 million in cash at the end of September and is actively seeking financing. Shares collapsed to new 52-week lows of $0.75 before closing the day at $0.80, down 92.76 percent.
Kerrisdale Capital confirmed last week's rumors and released a report describing Globalstar (NYSE: GSAT) as being “the most egregious $4 billion stock promotion since Sino-Forest.” The short-seller firm also stated that the company's Wi-Fi service concept will never prove to be commercially viable and that its spectrum are unlikely to generate material value. Shares hit new 52-week lows of $2.12 before closing the day at $2.27, down 24.58 percent.
Unisys (NYSE: UIS) announced that its CEO J. Edward Coleman will leave the company as of December 1 following the company's board of director deciding that “it is the right time to make a leadership change.” Shares lost 11.69 percent, closing at $20.84.
H&R Block (NYSE: HRB) stated that it may not receive regulatory approval to sell its banking unit to BofI Holding (NASDAQ: BOFI) until next year's tax season. Shares of H&R Block lost 5.53 percent, closing at $29.91 while shares of BofI lost 4.33 percent, closing at $71.12.
Earnings of Note
After the market closed, The Container Store (NYSE: TCS) reported its second quarter results. The company announced an EPS of $0.11, in-line with the consensus estimate. Revenue of $193.2 million missed the consensus estimate of $199.24 million.
Quote Of The Day
“I am Kobe. You are LeBron James. I have five rings, you have two rings –- probably going to five.” Bill Gross speaking to rival Jeffrey Gundlach.
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