U.S. stocks were mixed as a positive measurement of small business sentiment offset a disappointing retail data set.
Following Monday's action, the S&P 500 and Dow indices not only traded at new historical-all time highs, but closed at record highs. In fact, the S&P 500 briefly traded above the 1,900 level.
- The Dow gained 0.12 percent, closing at 16,715.44.
- The S&P 500 gained 0.04 percent, closing at 1,897.45.
- The Nasdaq lost 0.33 percent, closing at 4,130.17.
- Gold lost 0.12 percent, trading at $1,294.20 an ounce.
- Oil gained 1.23 percent, trading at $101.83 a barrel.
- Silver lost 0.04 percent, trading at $19.53 an ounce.
News of Note
The NFIB Small Business Optimism Index rose to 95.2 from a prior reading of 93.4 and topping the consensus of 94.5.
ICSC Retail Store Sales declined 0.1 percent week over week compared to a decline of 2.0 percent last week. Year over year, sales are up 3.9 percent, compared to a gain of 2.0 percent last week, mostly due to warmer weather and seasonal sales.
April Retail Sales rose 0.1 percent, below March's 1.2 percent gain. Analysts were expecting retail sales to rise 0.4 percent in April.
April Export Prices declined one percent compared to a gain of one percent in March. Analysts were expecting a gain of 0.2 percent in April.
April Import Prices declined 0.4 percent compared to a gain of 0.4 percent in March. Analysts were expecting a gain of 0.4 percent in April.
Redbook Chain Store Sales rose 4.2 percent year over year compared to a gain of 4.4 percent last week.
March Business Inventories rose 0.4 percent to $1,717.2 billion compared to a rise of 0.5 percent in February. Analysts were expecting March's inventories to rise 0.5 percent. Sales rose one percent to $1,325.7 billion with an Inventory/Sales ratio of 1.30.
China's industrial-output growth slowed to 8.7 percent on year in April from 8.8 percent in March. April's output fell short of analyst expectations for a growth of 8.9 percent.
Exit polls in India's elections point to a victory for the Bharatiya Janata Party led by Narendra Modi.
Analyst Upgrades and Downgrades of Note
Analysts at JPMorgan downgraded B/E Aerospace (NASDAQ: BEAV) to Neutral from Overweight with an unchanged price target of $95. Meanwhile, analysts at RBC Capital Markets maintained an Outperform rating on B/E Aerospace with an unchanged price target of $112. Shares lost 1.35 percent, closing at $97.83.
Analysts at JPMorgan maintained a Neutral rating on CF Industries (NYSE: CF) with a price target raised to $240 from a previous $215. Shares gained 3.01 percent, closing at $248.96.
Analysts at Citigroup maintained a Hold rating on Encana (NYSE: ECA) with a price target raised to $23 from a previous $20. Shares gained 1.86 percent, closing at $22.98.
Analysts at Dougherty & Company initiated coverage of GT Advanced Technologies (NASDAQ: GTAT) with a Buy rating and $29 price target. Shares gained 6.49 percent, closing at $14.28.
Analysts at Evercore Partners upgraded KKR (NYSE: KKR) to Overweight from Equal-weight with a price target unchanged at $28. Shares gained 1.22 percent, closing at $23.21.
Analysts at UBS maintained a Buy rating on McDonald's (NYSE: MCD) with a price target raised to $120 from a previous $107. Shares gained 0.65 percent, closing at $103.53.
Analysts at JPMorgan maintained an Overweight rating on McKesson (NYSE: MCK) with a price target raised to $215 from a previous $210. Taking the opposite side, analysts at Bank of America maintained an Underperform rating on McKesson with a price target raised to $165 from a previous $160. Shares gained 3.31 percent, closing at $180.00.
Analysts at JPMorgan maintained a Neutral rating on PVH (NYSE: PVH) with a price target raised to $131 from a previous $130. Shares lost 0.18 percent, closing at $132.64.
Analysts at Stifel Nicolaus downgraded Pinnacle Foods (NYSE: PF) to Hold from Buy while removing a previous $31 price target. Analysts at Credit Suisse also downgraded Pinnacle Foods to Neutral from Outperform with a price target raised to $36 from a previous $33. Shares lost 1.36 percent, closing at $34.00.
Analysts at Maxim Group maintained a Buy rating on Qihoo 360 (NASDAQ: QIHU) with a price target lowered to $100 from a previous $130. Shares lost 4.25 percent, closing at $80.34.
Analysts at JPMorgan maintained a Neutral rating on Ralph Lauren (NYSE: RL) with a price target lowered to $152 from a previous $170. Shares gained 1.24 percent, closing at $149.16.
Analysts at Wunderlich maintained a Buy rating and $83 price target on Time Warner (NYSE: TWX). Meanwhile, analysts at Bernstein upgraded Time Warner to Outperform from Market Perform with a price target raised to $84 from a previous $73. Shares lost 0.39 percent, closing at $69.17.
Analysts at Longbow Research downgraded Whirlpool (NYSE: WHR) to Neutral from Buy while removing a previous price target of $187. Shares lost 2.78 percent, closing at $151.55.
Equities-Specific News of Note
According to Bloomberg, Pfizer (NYSE: PFE) plans to raise its bid for AstraZeneca (NYSE: AZN) above the current offer of 50 pounds, or $84 a share. AztraZeneca's board of directors reiterated that Pfizer's offer does not reflect the full value of its future business and that the company could deliver as a standalone company. Shares of Pfizer gained 0.24 percent, closing at $29.20 while shares of AstraZeneca gained 0.63 percent, closing at $78.36.
Cemex (NYSE: CX) reported that its CEO Lorenzo Zambrano has died unexpectedly during a business trip in Europe. Shares gained 0.87 percent, closing at $12.81.
ConocoPhillips (NYSE: COP) reaffirmed prior guidance that it plans on delivering three percent to five percent growth in margins and volumes and has big plans for dividend distributions. Shares gained 0.29 percent, closing at $78.64.
Pembina Pipeline (NYSE: PBA) will proceed with plans to build a 55,000 barrel per facility at its Redwater complex. Shares hit new 52-week highs of $42.76 before closing the day at $41.69, up 2.23 percent.
AT&T (NYSE: T) is reportedly close to acquiring DirecTV (NYSE: DTV) with Bloomberg speculating the deal could occur at around $100 per share, valuing a potential deal at around $50 billion. Shares of AT&T lost 1.01 percent, closing at $36.20 while shares of DirecTV lost 1.24 percent, closing at $86.08.
Related: Billion AT&T DirecTV Merger Reportedly Two Weeks Away
Duke Energy (NYSE: DUK) announced it will invest $1.86 billion on several major construction projects in Florida including a 1,640-megawatt combined cycle natural gas plant. Shares lost 0.06 percent, closing at $71.72.
Microsoft (NASDAQ: MSFT) announced it will begin selling the Xbox One without the Kinect function for $100 than it charges for the complete Xbox One system. Shares gained 1.13 percent, closing at $40.42.
PetroChina (NYSE: PTR) will spin off part of its transnational gas pipelines business and values its assets at $4.7 billion to $6.3 billion. Shares gained 2.00 percent, closing at $118.94.
BlackBerry (NASDAQ: BBRY) unveiled its Z3 “Jakarta Edition” $200 smartphone manufactured by Foxconn which is intended for the Indonesian market. Shares gained 0.13 percent, closing at $7.45.
Credit Suisse (NYSE: CS) may be forced to pay more than $2 billion as a penalty for helping U.S. citizens avoid paying certain taxes. Shares lost 2.80 percent, closing at $29.52.
Valeant (NYSE: VRX) plans to raise its $45.7 billion offer to acquire Allergan (NYSE: AGN) and will host a Webcast to discuss the offer on May 28. Shares of Valeant gained 0.60 percent, closing at $129.64 while shares of Allergan gained 0.98 percent, closing at $161.28.
Winners of Note
Last night, Rackspace (NYSE: RAX) reported its first quarter results. The company announced an EPS of $0.18, beating the consensus estimate of $0.12. Revenue of $421 million beat the consensus estimate of $419.63 million. Net income for the quarter rose to $27.26 million from $20.80 million in the same quarter a year ago as cloud revenue and web hosting revenues rose three percent quarter over quarter to $299.7 million and public cloud revenue rose four percent quarter over quarter and 34 percent year over year to $121.4 million. Average revenue per server rose $14 to $1,336 with 106,200 servers deployed, representing a rise of two percent from last quarter. Rackspace issued guidance and sees its second quarter revenue to be $434 million to $440 million versus the consensus estimate of $435.5 million. Analysts at Credit Suisse maintained an Outperform rating on Rackspace Hosting with a price target lowered to $40 from a previous $49. Analysts at both DA Davidson and Nomura maintained Neutral ratings with price targets of $33 (from a previous $30) and $39 (from a previous $42), respectively. Shares gained 8.54 percent, closing at $29.88.
Coca-Cola disclosed that it raised its ownership stake in Keurig Green Mountain (NASDAQ: GMCR) to 16 percent from ten percent. Coca-Cola has now become Keurig's single largest shareholder since the two companies established a long-term agreement back in February. Shares of Keurig gained 7.55 percent, closing at $119.07.
Decliners of Note
Last night, Elizabeth Arden (NASDAQ: RDEN) reported its third quarter results. The company announced an EPS of -$0.84, missing the consensus of $0.01. Revenue of $210.84 million missed the consensus estimate of $256.85 million. Net loss for the quarter rose to $26.4 million from a net loss of $1.3 million in the same quarter a year ago as North American sales fell 23 percent to $121.9 million in a heavy promotional environment and international sales declining 16 percent to $89 million. The company's gross profit rate sunk 520 bps to 42.5 percent in the quarter. Shares were initially halted as the company announced it has hired Goldman Sachs bankers to explore strategic alternatives. Shares lost 22.82 percent, closing at $27.50.
Shares of OpenTable (NASDAQ: OPEN) sank following an announcement that Yelp has began offering a restaurant reservation service that is integrated with its website. Yelp's new venture will compete head on with OpenTable with one major difference. OpenTable charges restaurants a set of fees to restaurants, whereas Yelp's service will be free for restaurants that establish a relationship with Yelp. As a reminder, TripAdvisor also made a move in to the reservation category last week when it acquired LaFourchette. Shares of OpenTable lost 7.03 percent, closing at $64.76.
Related: OpenTable CEO To CNBC: You Come Because It Is The Best Solution
Earnings of Note
This morning, CST Brands (NYSE: CST) reported its first quarter results. The company announced an EPS of $0.14, missing the consensus estimate of $0.19. Revenue of $3 billion missed the consensus estimate of $3.07 billion. Net income for the quarter fell to $11 million from $23 million in the same quarter a year ago despite increases in gross margins within the motor fuel and U.S. merchandise divisions. However, revenue in the quarter was $200 million lower than a year ago driven by a five percent decline in motor fuel gallons sold and a four percent decline in the company's motor fuel selling price. The company also saw its Canadian segment report a decline of $104 million from a year ago due to foreign currency effects. Shares lost 3.34 percent, closing at $32.17.
After the market closed, Take-Two Interactive Software (NASDAQ: TTWO) reported its fourth quarter results. The company announced an EPS of $0.21, beating the consensus estimate of $0.10. Revenue of $233.2 million beat the consensus estimate of $201.51 million. Shares were trading lower by 1.60 percent at $20.30 following the earnings release.
Quote of the Day
"The intermarket picture has become more negative for gold. Specifically we've seen a breakout in the equity market, specifically the S&P 500, which suggests that investors are becoming less concerned about what's going on in Ukraine, and investors are becoming more confident about global growth, at least in the short term. And furthermore, you've seen also seen the dollar start to reverse on the topside. When you put that together in conjunction with the price action, all that says that the risk-reward is for gold to resume that downtrend that began in mid-March." - MacNeil Curry, head of global technical strategy at Bank of America discussing with CNBC why gold could drop as much as nine percent.
- Mid-Afternoon Market Update: Markets Trade In Choppy Session As Elizabeth Arden Shares Remain Down
- Mid-Day Market Update: Rackspace Gains On Upbeat Earnings; DXP Enterprises Shares Slip
- Mid-Morning Market Update: Markets Gain; Elizabeth Arden To Explore Strategic Alternatives
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