Daily Wrap
DJIA +59.98 (+0.41%) to 14,673.46; S&P 500 +5.54 (+0.35%) to 1,568.61; NASDAQ +18.54 (+0.67%) to 2,804.67
The markets opened today slightly higher and consolidating until just after noon EST when the market started to breakout and move strongly higher. This rally lasted until around 3pm EST when the market topped and then started to sell of into the close.
Stock of the day, or at least driving the headlines, was Herbalife (HLF) whose shares were halted which sparked discussion about Icahn and Ackman and what might be going on with the shares. Ultimately the news was KPMG resigned as auditor amidst allegations of insider trading by one of KPMG’s former partners. While the issue was not specifically with HLF, it didn’t stop the shares from closing 3.75% lower and they received a downgrade at DA Davidson. The move seems to be more about the downgrade and the general fear/trepidation surrounding the name as Skechers (SKX) had the same KPMG resignation and closed higher for the day.
The other stock driving discussion was J.C. Penney (JCP) following up on last night’s decision to part ways with Ron Johnson. There doesn’t seem to be a clear consensus on what this will mean for the company. While many are happy with the decision, JCP was in trouble when Mr. Johnson took over, they continued to have tough sledding during his tenure and now need to chart a coarse going forward. Going back to what they did before him doesn’t make much sense since that was perceivable not working and Mr Johnson’s plans were obviously unacceptable so I am not sure where that eaves them and what the plans are. Trading the stock technically is one thing but I don’t know that I would be interested in an investment in JCP until I had more clarity.
First Solar (FSLR) gained over 45% after reporting earnings that beat estimates and provided guidance out to 2015. Along with FSLR, many of the other solar names moved higher including the Solar ETF “TAN”.
On the downside today, A. Schulman (SHLM) closed 12.84% lower after lowering 2013 EPS. Also moving lower was OCZ Technology (OCZ) which closed down 8.33% after announcing that they will not meet Nasdaq’s deadline for becoming current on their filings.
From the Watch List today I closed the last piece of Bed Bath & Beyond (BBBY) since it has earnings 4/10 and I wasn’t really looking to be involved with the name for earnings and felt locking in gains would be more appropriate. That isn’t to say there was a problem with the chart itself and again more just a risk/reward scenario going into an EPS report. Also, stops on the last piece of Cloud Peak Energy (CLD) was moved up.
The S&P 500 has rallied strong off Friday’s gap down lows which also correlated with strong support on the daily chart. Today that rally continued until around 3pm EST when we saw the market start to sell off from the highs. The market’s tone clearly looks to be positive but if it is ready to press to new highs right here right now is yet to be seen.