Daily Wrap
DJIA +106.20 (+0.72%) to 14,818.75; S&P 500 +11.37 (+0.72%) to 1,593.61; NASDAQ +26.40 (+0.93%) to 2,866.95
The market continues its recovery from the recent dip now not also challenging recent highs but making all time highs (closing and intraday). The trend remains strongly in-tact with the SPY up over 12.36% YTD and maybe more astoundingly 16.99% over a rolling 12 month period.
In economic news today we saw Personal Spending meet forecasts with a 0.2% increase but Personal Income not only missed forecasts of a 0.4% gain but actually ticked down 0.2%. Lastly, Pending Home sales beat expectations with a 1.5% increase over last month when 1.1% was expected and following the previous month which was actually down 1%.
I have been following and providing the merger Monday noted and again today we saw some M&A activity. Telular (WRLS) agreed to be acquired by Avista Capital for $12.61 per share which represents an over 31% increase from Friday’s closing price. Also, Conceptus (CPTS) agreed to be acquired by Bayer HealthCare (BAYRY) for $31 per share in cash. Not as impressive as WRLS’ premium but this still values CPTS at over 19% from Friday’s close. Not quite a merger but a rumor of a merger which was started by the Wall Street Journal is Valeant Pharmaceuticals (VRX) and Actavis (ACT). Following on WSJ’s Friday report, Bloomberg reported today that those talks have stalled due to disagreements over price but that did not stop ACT from gaping higher and closing 4.6% up for the day, while off the highs..
Sina (SINA) closed off the highs but still up 9.4% for the day after announcing a strategic alliance with several affiliated entities including Alibaba. The alliances goal is to better connect Alibaba merchants with Sina Weibo users. Weibo being a “twitter like” website owned by SINA. Also in this report, and more likely the cause of today’s gap in SINA, it was noted that Alibaba paid $586 million for an 18% stake in Weibo.
We are still in earnings season and today a notable name losing on their report was Nam Tai Electronics (NTE) which lost over 30% on the day after disappointing Wall Street.
The following noteworthy companies are scheduled to report earnings before tomorrow’s open: PFE, EPD, NEE, BEN, MPC, ECL, HCP, VLO, CMI, SIRI, AET, PEG, MHP, IVZ, X, AVP
In analyst notes today, Disney (DIS) was upgraded to Buy at UBS with a $72 price target. Also receiving upgrades to Buy included LifePoint Hospitals (LPNT), ArcelorMittal (MT) and Tenet Healthcare (THC). On the downside there were actually many names I saw but not many calls that had great conviction. One that did was Citigroup’s downgrade on Empresas ICA (ICA) to Sell. Other names being downgraded inlcuded JetBlue (JBLU), Gold Field (GFI) and Sprint (S). Some of these and other upgrades and downgrades for the day can be found each morning when I post my 9 @ 9 in the Upgrades/Downgrades section.
The trend remains your friend as we have yet again managed to take a dip and make it a buying opportunity. After a sell off which lasted until Thursday 4/18 we have seen a relatively unabated rally which has taken us back toward the recent and all time highs. While it feels good and might continue in the short term (especially with an all time intraday print so close for the S&P 500), we are extended and have to be aware that it would not only be reasonable but healthy for a more prolonged consolidation.
