March 29, 2024

Daily Wrap

DJIA +89.16 (+0.61%) to 14,662.01; S&P 500 +8.08 (+0.52%) to 1,570.25; NASDAQ +15.69 (+0.48%) to 3,254.86

Yesterday seemed almost too easy with the markets starting higher and then selling off on what I noted was light volume but decisively negative.  The new quarter had started and brought along with it a sell off.  There was that pesky end of day rally though.  That one that happened toward the very end of the day and left open the idea that the market could build off that push and that is what then happened today.  The markets gaped higher and never dipped back into negative territory.  The markets did start to dip hard after the 2:30pm EST time frame but ultimately they only retraces to the 50% fib retracement level of yesterday’s lows and today’s highs and then again bounced late in the day.  It will be interesting to see if the market can yet again build on a late day rally into the next trading day.

Today was a relatively light economic day which also saw Total Vehicle sales released which came in in-line with analysts expectations of 15.3M.

To had some takeover news as BGC Partners (BGCP) moved 48.57% higher after agreeing to sell its eSpeed treasury trading platform to Nasdaq OMX Group (NDAQ).  The deal is a combination of cash and stock which is reportedly valued as high as $1.23B.  That is pretty impressive considering BGCP, even with today’s gap of over 48%, has a market cap of roughly $631B.  Also moving higher on news of a merger (or at least potential merger) was Obagi Medical (OMPI) which closed up 16.08% after Merz Pharma made an unsolicited proposal to acquire the company for $22 per share.

Moving on earnings news but in opposite directions today was Hertz (HTZ) and Delta (DAL).  HTZ moved 6.85% higher after reaffirming revenue and earnings for the remainder of 2013 and out to 2015 including 2015 EPS estimates of $3.10-$3.30 and CAGR of 12.5%-13.5% through 2015 which is almost double what their previous guidance was for CAGR.  On the other side DAL reported March operating performance up 2% year over year and that they see Q1 revenue up 4%-4.5% but that wasn’t enough and the stock closed over 8% lower today.

Healthcare stocks followed through again today following the news of changes in Medicare Advantage rates.  Some names to watch from an analyst note I saw highlighting the names that most benefit are: Humana (HUM), WellCare (WCG), Health Net (HNT), Universal American (UAM), and UnitedHealth (UNH).

The following noteworthy companies are scheduled to report earnings before tomorrow’s open: MON, CAG, AYI, CONN, SCHN, OMN

In analyst notes today, Goldman Sachs told Apple Computers (AAPL), we like you but we don’t like like you by downgraded the name but only to Buy from Conviction Buy.  Goldman then flat out told Hewlett-Packard (HPQ) that they don’t like them by downgrading the name to Sell from Neutral along with a $16 price target which was about 30% lower than yesterday’s closing price.  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.

Last night I noted that Monday’s decline was unable to take us below the 20 day SMA and ultimately the market was able to build on a very late rally off the lows Monday into a gap higher today.  We made the highs around noon and then pulled back the remainder of the day (but for a while it looked as though the market was flagging to press higher into the close). We still never went much below the 50% retracement from yesterday’s and again managed an end of day rally.  Can they build on that and start a run again tomorrow?  Maybe towards the intraday all time highs in the S&P 500 which have yet to yield?  It looks like that’s what it wants.

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