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Stocks Rise Modestly on Flurry of Data Ahead of Fed

Dan Berman
Hot Stock Minute

Stocks rose modestly today as investors weighed several economic reports before next week's critical Fed meeting. At issue is whether the central bank will in fact begin to taper its bond-buying stimulus program. The Fed can now consider August retail sales as part of their decision. The Commerce Department says sales rose just 0.2% for the month compared to estimates of 0.5% and suggesting that economic growth slowed in the third quarter. Meanwhile a different report from the Labor Department shows producer prices rose 0.3% in August as energy costs rebounded. The consensus there had been for a gain of 0.2%. Business inventories climbed 0.4% in July. That's their biggest increase in six months, and exceeded estimates of 0.2%.

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Goldman Sachs (GS) rose 0.5% on news of a possible windfall. The bank will be the lead underwriter for Twitter's IPO. The microblogging site has moved closer to a planned offering with the filing of confidential SEC documents. Private sales of Twitter stock give the company a valuation of $9 billion.

Facebook (FB) fell 1% today despite two more upgrades. JPMorgan has raised its price target on the social network to $53 a share and RBC Capital has hiked its target to $52. Facebook is up 88% over the last three months, with the biggest climb coming the week of July 22nd, when the company reported earnings. It's up about 17% since that now notorious IPO.

Apple (AAPL) fell over 1% today on a price-target cut to $425 by Jefferies. Analyst Peter Misek trimmed 2014 earnings estimates to $37.95 per share from $38.78. Compare that to the consensus of $42.66. It all stems from Apple's new iPhones. Misek says the price on the new 5C is too close to existing models. He also predicts supply problems with the 5S because of the fingerprint sensor. Apple stock is now down 14% year-to-date. It's down 31% over the past year.

Meanwhile, Intel (INTC) climbed over 3% on an upgrade from Jefferies. The chipmaker is now listed as a buy, up from hold. Jefferies also raised its price target for Intel to $30 from $27 per share. Why the change? Company analysts cite Intel's emphasis on chips that use less power, work better and cost less.

Ulta Salon, Cosmetics & Fragrance (ULTA) skyrocketed 17% on its quarterly earnings. The chain reported making 70-cents a share, 3-cents better than estimates. Revenue also beat forecasts at $601 million versus $588.37 million. Ulta is also raising its forecast for the current quarter, predicting a rise of 5% to 7% in same-store sales. Three separate firms upgraded the stock on its report.

JPMorgan (JPM) rose 0.7% despite a worrisome report in the Wall Street Journal. The paper says the bank has now committed an additional $4 billion dollars and 5,000 employees to deal with its risk and compliance problems. The company currently faces at least seven separate investigations by the Justice Department stemming from activities during the financial crisis. The bank has already spent $18 billion defending itself since 2008. JPMorgan shares have pulled back a bit over the last six weeks, but remain up about 17% year-to-date.

Safeway (SWY) climbed 6% on announcement of a dividend. The supermarket chain will pay 20-cents a share on October 10th to shareholders of record on September 17th. At the stock's current price, that's a yield of 3%. Yesterday Forbes reported that Safeway is the 21st most-shorted stock in the S&P 500.

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