Daily Wrap
DJIA -106.59 (-0.69%) to 15,302.80;S&P 500 -11.70 (-0.70%) to 1,648.36;NASDAQ -17.12 (-0.57%) to 2,994.82
The markets spend the entire day down and started off with a 10+ point drop. After finally finding a bottom around 11am EST down over 17 the S&P 500 rallied into the 2:30 pm EST time frame and finally drifted lower the remainder of the day giving up some of those midday gains. The market did not breach the 5/23-5/24 lows and has also remained above the 20 day SMA. Overall I still view the market as bullish and deciding whether it will consolidate as a triangle with the short term lows in or one more sell off and then bottom. A close below $1600 in the &P 500 cash potentially changes that assumption.
Yesterday we saw a few takeovers and today they continued. Smithfield Foods (SFD) agreed to be acquired by China’s Shuanghui International for $34 per share which represented a near 30% premium to Tuesday’s closing price. Service Corporation (SCI) announced they plan to purchase Stewart Enterprises (STEI) for $13.25 per share in cash which represented an over 33% premium to Tuesday’s close. If your not familiar with these company’s they are in the “death services” including funeral homes, cemeteries etc. Also interestingly enough, while off its highs, SCI the acquirer also closed higher on the day up 4.65%.
News out of the gaming industry sent to notable names lower as Pinnacle Entertainment (PNK) and Ameristar Casinos (ASCA) closed down 8.24% and 1.46% respectively on news that the FTC challenged PNK’s proposed acquisition of ASCA.
Moving on earnings announcements today included Brown Shoe (BWS) which gained over 11% on their report and MRC Global (MRC) which lost over 14% after missing street expectations.
The following noteworthy companies are scheduled to report earnings before tomorrow’s open: COST, JOY, BIG, EXPR, SAFM
In analyst notes today, Analog Devices (ADI) was upgraded to Buy at Citigroup with a $54 price target. Citigroup also upgraded Microchip (MCHP) to Buy with a $47 price target. Lastly, Palo Alto (PANW), which is a name I like and follow, was upgraded to Outperform at Pacific Crest with a $65 price target. On the downside, Citigroup remained active on the day and downgraded Maxim (MXIM) to Neutral from Buy and lowered the price target to $33. 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.