U.S. stocks were mildly higher as the second quarter comes to an end on Monday, before the markets pause for the Fourth of July holiday.
Economic data was light as investors showed little interest as consumer sentiment improved in June from May.
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The Dow gained 0.03 percent, closing at 16,851.78.
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The S&P 500 gained 0.19 percent, closing at 1,960.98.
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The Nasdaq gained 0.43 percent, closing at 4,397.93.
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Gold gained 0.08 percent, trading at $1,318.10 an ounce.
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Oil lost 0.08 percent, trading at $105.76 a barrel.
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Silver lost 0.36 percent, trading at $21.08 an ounce.
News of Note
June Reuters/UofM Consumer Sentiment rose to 82.5 from 81.2 in May, topping estimates of 81.9.
Russell Investments initiated its annual index realignment today, affecting $5 trillion in assets.
BNP Paribas is expected to pay an $8.9 billion fine and plead guilty to violating U.S. sanctions between 2002 and 2009.
Analyst Upgrades and Downgrades of Note
Analysts at Jefferies maintained a Buy rating on Abercrombie & Fitch (NYSE: ANF) with a price target raised to $60 from a previous $50. Shares gained 1.73 percent, closing at $43.04.
Analysts at JPMorgan maintained an Overweight on Accenture (NYSE: ACN) with a price target lowered to $88 from a previous $90. Shares lost 0.22 percent, closing at $81.35.
Analysts at Barclays downgraded Air Products & Chemicals (NYSE: APD) to Equal-weight from Overweight with a price target raised to $135 from a previous $125. Shares lost 0.17 percent, closing at $128.61.
Analysts at Citigroup maintained a Neutral rating on CSX Corporation (NYSE: CSX) with a price target raised to $31 from a previous $28. Shares gained 0.39 percent, closing at $30.77.
Analysts at JMP Securities maintained a Market Outperform rating on Celgene (NASDAQ: CELG) with a price target lowered to $102 from a previous $205. Shares hit new 52-week lows of $85.82 before slightly rebounding and closing the day at $86.80, up 0.21 percent.
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Analysts at Buckingham Research initiated coverage of Expedia (NASDAQ: EXPE) with a Neutral rating and $75 price target. Shares gained 2.52 percent, closing at $78.95.
Analysts at Benchmark upgraded Glu Mobile (NASDAQ: GLUU) to Buy from Hold. Shares gained 4.94 percent,c losing at $4.67.
Analysts at Citigroup maintained a Buy rating on Google (NASDAQ: GOOG) with a price target raised to $686 from a previous $675. Shares gained 0.10 percent, closing at $576.60.
Analysts at Buckingham Research initiated coverage of Las Vegas Sands (NYSE: LVS) with a Neutral rating and $73 price target. Shares lost 1.08 percent, closing at $75.92.
Analysts at Buckingham Research initiated coverage of MGM Resorts (NYSE: MGM) with a Buy rating and $32 price target. Shares lost 1.16 percent, closing at $26.41.
Analysts at Citigroup maintained a Buy rating on Monsanta Company (NYSE: MON) with a price target raised to $146 from a previous $130. Shares lost 0.94 percent, closing at $125.00.
Analyst at Citigroup maintained a Buy rating on Nike (NYSE: NKE) with a price target raised to $90 from a previous $85. Meanwhile, analysts at Deutsche Bank maintained a Buy rating on Nike with a price target raised to $90 from a previous $85. Also, analysts at Barclays maintained an Overweight rating on Nike with a price target raised to $90 from a previous $85. Shares gained 1.07 percent, closing at $77.68.
Analysts at Buckingham Research initiated coverage of Priceline Group (NASDAQ: PCLN) with a Neutral rating and $1,400 price target. Shares lost 1.0 percent, closing at $1,205.47.
Analysts at Credit Suisse maintained an Outperform rating on Schlumberger (NYSE: SLB) with a price target raised to $137 from a previous $120. Shares hit new 52-week highs of $117.80 before closing the day at $117.80, up 1.45 percent.
Analysts at Sterne Agee initiated coverage of UnitedHealth Group (NYSE: UNH) with an Underperform rating and $80 price target. Shares lost 0.35 percent, closing at $82.00.
Analysts at Buckingham Research initiated coverage of Wynn Resorts (NASDAQ: WYNN) with a Buy rating and $255 price target. Shares lost 0.55 percent, closing at $206.89.
Equities-Specific News of Note
Encana (NYSE: ECA) has agreed to sell its Bighorn assets in the Alberta Deep Basin for $1.8 billion to Jupiter Resources. Shares lost 1.21 percent, closing at $23.62.
Last night, DuPont (NYSE: DD) lowered its outlook and expects its second quarter EPS to be moderately below the $1.28 the company earned in the same quarter a year ago. Additionally, the company lowered its full year 2014 EPS guidance to $4.00 to $4.10. Shares lost 3.34 percent, closing at $65.44.
Chinese based Tencent has agreed to buy a 19.9 percent stake in 58.com (NYSE: WUBA) for $736 million, or $40 per share. Shares gained 5.13 percent, closing at $54.90.
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Allergan (NYSE: AGN) and Bill Ackman's Pershing Square stated that calling a special shareholder meeting over a Valeant Pharmaceuticals' (NYSE: VRX) acquisition will not trigger its poison pill measure. Shares of Allergan hit new 52-week highs of $173.96 before closing the day at $173.95 while shares of Valeant gained 1.86 percent, closing at $128.85.
Mexicon tycoon Carlos Slim will purchase AT&T's 8.3 percent stake in America Novil (NYSE: AMX). Shares of America Novil gained 5.08 percent, closing at $20.69.
Hewlett-Packard (NYSE: HPQ) said that is close to settling three shareholder suits over its Autonomy acquisition. Shares finished the day unchanged at $33.91.
A federal grand jury is investigating General Motors' (NYSE: GM) recall of over 2.5 million cars due to faulty ignition switches. Also, General Motors announced it will recall nearly 200,000 Buick cars in China due to a headlight issue. Shares lost 0.51 percent, closing at $36.71.
Winners of Note
According to analysts at Goldman Sachs said that Universal Display's (NASDAQ: OLED) product cycle is under-appreciated by investors. The analysts speculated that Universal Display's technology will be used in a plethora of future devices in mobile, TV and wearable products. Shares gained 7.98 percent, closing at $31.51.
Last night, Relational Investors confirmed that it initiated an 8.52 percent active stake in Manitowoc (NYSE: MTW). The investment fund believes that shares are undervalued because of the combination of its two businesses that should split off to maximize shareholder value. The company stated today that it will consider the spin-off proposal. Shares gained 10.84 percent, closing at $32.93.
Amedisys (NASDAQ: AMED) issued guidance and expects its second revenue to be $300 million to $305 million and earn $0.15 to $0.20 per share. This would compare favorably from the first quarter when the company posted an operating loss. Shares surged 29.81 percent, closing at $17.46.
GoPro (NASDAQ: GPRO) continued its post-IPO surge trading as high as $40.47 before closing the day at $35.76, up 14.10 percent.
Decliners of Note
Dollar General's (NYSE: DG) CEO Rick Drelling will retail next year following a seven-year stint as head of the company. Analysts at Wells Fargo commented that Drelling's retirement lowers the likelihood of a merger with Family Dollar as the company will not change its strategic course over the next year. Shares of Dollar General lost 7.28 percent, closing at $57.19
Chatter began surfacing across trading and news desks that sources have told DealReporter, Rackspace (NYSE: RAX) that the company is not receiving any interest from potential acquirers. Shares lost 7.30 percent, closing at $33.63.
Gibraltar Industries (NASDAQ: ROCK) lowered its second quarter EPS guidance to a range of $0.14 to $0.16 from a previous range of $0.29 to $0.32. Gibraltar Industries also expects its revenue to be $230 million to $232 million, below the consensus estimate of $236 million. The company noted that demand for its residential products were weak in the quarter resulting in a possible six percent decline in the segment's revenue as opposed to a previous guidance of 20 percent growth. Shares lost 7.89 percent, closing at $15.30.
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Earnings of Note
This morning, KB Home (NYSE: KBH) reported its second quarter results. The company announced an EPS of $0.27, beating the consensus estimate of $0.20. Revenue of $565 million beat the consensus estimate of $563.1 million. Net income for the quarter rose to $26.6 million from a net less of $3.0 million in the same quarter a year ago due to improvements in selling as net orders of homes rose five percent to 2,269 while the average community count rose seven percent to 191. Also, the average selling price of homes rose ten percent year over year to $319,700 helping boost the gross profit margin by 380 bps to 18.9 percent. The company noted it had a backlog of 3,398 homes, which was nine percent higher than a year ago. Additionally, the backlog value has risen 24 percent from a year ago to $1.03 billion. Shares gained 4.53 percent, closing at $18.69.
Quote of the Day
“I bought VXX as a play on volatility. But a week went by, two weeks, and the price went down.” – Robert E. Whaley, the “father of the ‘fear index' criticizing the ETF following observations that the ETF has lost value while the CBOE Volatility Index gained value.
Bonus Quote of the Day
“We agree that VIX investments can require a degree of sophistication and maintenance that is different to – for example – an S&P 500 ETF. We continue to support educational efforts on the construction and nature of volatility indices globally. However, if Professor Whaley truly thinks there is anyone at S&P Dow Jones Indices who believes they can predict the future direction of such indices, we are flattered, but he is mistaken.” – An S&P Dow Jones Indices spokesman responding to Whaley's harsh criticism off the ETF.
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