Daily Wrap
DJIA -33.49 (-0.23%) to 14,526.16; S&P 500 -0.92 (-0.06%) to 1,562.85; NASDAQ +4.04 (+0.12%) to 3,256.52
Today the markets started lower gaping down over 10 point in the S&P but the first 10 minuted of trading proved to set the lows and we remarkable rallied to positive for the day before finally closing ever so slightly lower. This had made a few occasions where the market has given the Bears a head fake and has continued to show resilience. I have been expecting this week to be up or at least neutral and with tomorrow being the last day of the trading week and with the Unemployment claims and the Cyprus banks re-opening being out of the way, it will be interesting to see if the market again digest that headline information and continue higher.
Cliffs Natural Resources (CLF) gaped lower by 13.86% as two firms downgraded the name. The first was Credit Suisse which rates the stock an Underperform and lowered the price target to $10 from $30 and also added that the recent capital raise is not a long term solution to the balance sheet issues citing further measures are needed. Next was Morgan Stanley which downgraded the name to Underweight from Equal weight and cut the price target to $14 from $36 citing structural and operational challenges. There was a lone upgrade at Goldman Sachs but it was just to Neutral and based on valuation while keeping their price target at $20. Could a contrarian start to get interested in the name? It is certainly beaten down and indications of slowing momentum are around but except for quick little trades I might wait for a more clear opportunity even if that meant paying higher.
Another stock moving on Analyst comments today was AOL (AOL) which gained over 8% after receiving an upgrade to Overweight at Barclays and a $44 price target and moving lower was Rackspace (RAX) lowing 4.4% after CLSA initiated the stock with an Underperform. As a reminder that you can review the 9 @ 9 which is the top upgrades and downgrades I find posted by 9am EST in the Upgrades/Downgrades section.
The following noteworthy companies are scheduled to report earnings before tomorrow’s open: MOS, SIG, GME, BBRY, CMC, ACN, UTIW, FINL, WGO
It will be interesting to see how the market reacts to the news starting at 6am EST when the Cyprus banks re-open and then again at 8:30 am EST when Unemployment claims are announced. My bias remains that left to its own devices the market will continue to drift with the bullish trend but I have to note the headline risk that could drive the market lower if we ultimately see great panic in Cyprus turn violent.
