19 Min Read
(For faster updates on individual market-movers, Eikon users please use search string "STXBZ US"; for more market insights, including options activity, ; for the Day Ahead newsletter, link.reuters.com/mex49s; for the Morning News Call newsletter, link.reuters.com/nex49s) Disappointing earnings from Amazon and Visa dragged U.S. stocks lower on Friday in a broad selloff led by consumer discretionary shares. The Dow Jones industrial average was down 0.87 percent at 16,935.91, the S&P 500 was down 0.56 percent at 1,976.84 and the Nasdaq Composite was down 0.60 pct at 4,445.49.
** AMAZON.COM INC, $322.3899, -10.10 pct
** SYNAPTICS INC, $74.56, -6.99 pct
The world's largest online retailer posted a much larger-than-expected second-quarter loss as it continues its rapid pace of investment in new businesses such as digital content and consumer electronics.
Amazon's heavy investment in content and technology to fight off deep-pocketed rivals is proving to be more costly than many had expected, raising fears that operating earnings will remain under pressure indefinitely.
Shares of Synaptics, which provides chips for Amazon's new Fire smartphone, also fell on the news.
** VISA INC, $213.9, -3.97 pct
** MASTERCARD INC, $75.82, -2.26 pct
The world's largest credit and debit card company cut its revenue forecast for the year as growth in cross-border transactions slowed amid a strengthening of the U.S. dollar.
Shares of rival Mastercard also fell on the news.
** XEROX CORP, $13.23, +3.04 pct
The company reported a 2 percent fall in second-quarter revenue, hurt by lower demand in its printing business, but forecast current-quarter earnings per share in line with analysts' average estimate and raised the low end of its full-year 2014 earnings per share forecast.
** STANLEY BLACK & DECKER INC, $90.645, +6.62 pct
The power tools maker's second-quarter profit beat the analysts' average estimate as margins rose.
The company said it expects strong growth in its industrial segment and raised its full-year profit forecast to $5.50-$5.60 per share from $5.35-$5.50.
** STARBUCKS CORP, $78.6243, -2.27 pct
The world's biggest coffee chain said on Thursday that quarterly sales at established stores in its dominant Americas region grew a somewhat stronger-than-expected 6 percent, including a 7 percent rise for the United States that was helped by food sales.
But Starbucks' sales gains did not rival those from Chipotle Mexican Grill Inc, the burrito chain that has a lot of customer overlap with Starbucks.
** RIVERBED TECHNOLOGY INC, $18.5175, +3.39 pct
The network equipment maker forecast third-quarter revenue and adjusted profit largely above the average analyst estimate.
At least three brokerages cut their price targets on the stock, while Buckingham Research raised its price target by $1 to $20. The median price target on the stock has remained unchanged at $20 for the past 90 days, according to Thomson Reuters data.
** SOLARWINDS INC, $44.2, +11.73 pct
The network management software maker forecast current-quarter revenue above analysts' expectations late on Thursday.
The company's second-quarter revenue and profit beat estimates, helped by acquisition of website performance monitoring company Pingdom in June.
FBR raised its price target on the stock to $48 from $46 with a "market perform" rating, while Needham raised its price target to $53 from $50 with a "buy" rating. The median price target on the stock was $48.
** PANDORA MEDIA INC, $25.59, -10.90 pct
The music streaming service provider forecast current quarter adjusted profit below the analysts' average estimate as it plans to plow money back into the business. The company's shares fell about 6 percent in extended trading.
Cowen and Co cut its price target on the stock to $38 from $41, maintaining its "outperform" rating. Analysts had a median price target of $35 on the stock, according to Thomson Reuters.
Of the 30 analysts covering Pandora, 22 rate the stock "buy" or higher, six "hold" and two rate it "sell."
** UNITED CONTINENTAL HOLDINGS, $46.98, +4.59 pct
** JETBLUE AIRWAYS CORP, $11.29, +2.08 pct
** SOUTHWEST AIRLINES CO, $29.2, +1.81 pct
** DELTA AIR LINES INC, $38.31, +0.63 pct
** ALASKA AIR GROUP INC, $45.77, +1.64 pct
Evercore Partners raised its price target on United Continental Holdings to $50 from $48. Raymond James also raised its price target to $55 from $50 after the company reported a better-than-expected profit.
Evercore raised its price target on JetBlue Airways to $11 from $10 and Southwest Airlines to $32 from $30. On Thursday, American Airlines Group and United Continental announced share buybacks.
** WELLCARE HEALTH PLANS INC, $61.52, -19.95 pct
** CENTENE CORP, $74.61, -6.32 pct
** MAGELLAN HEALTH, $58.72, -6.53 pct
** HUMANA INC, $129.46, -2.59 pct
** MOLINA HEALTHCARE, $44.03, -4.76 pct
Healthcare providers' shares fall after Wellcare Health Plans reported weak quarterly results and halved its full-year outlook for adjusted profit, citing high costs for Medicaid plans in Florida.
Wells Fargo cut its rating on Wellcare's stock to "market perform" from "outperform." Of the 16 analysts covering the stock, eight rate it "buy" or higher, six rate it "hold" and two "sell."
** ROYAL BANK OF SCOTLAND GROUP PLC, $12.38, +10.73 pct
The part-nationalised lender boosted its chances of an earlier than expected return to private ownership, posting a surprise 1 billion pound ($1.7 billion) second-quarter profit as its painful restructuring begins to bear fruit.
** LYONDELLBASELL INDUSTRIES NV, $107.24, +4.71 pct
The chemical maker's second-quarter sales rose to $12.1 billion from $11.1 billion a year earlier.
The company reported earnings from continuing operations of $2.22 per share versus $1.60 a year earlier. Sales in its Olefins and Polyolefins business in the Americas rose 6.5 percent, to the highest in the past five quarters. Margins in the business benefited from lower natural gas and liquids costs and higher prices.
** BAIDU INC, $224.71, +10.01 pct
** QIHOO 360 TECHNOLOGY CO LTD, $100.65, +5.27 pct
China's biggest Internet search company blew past Wall Street's targets with a 34.1 percent jump in quarterly net profit, helped by a surge in mobile revenue.
Shares of rival Qihoo 360 also rose on the news.
** LOGMEIN INC, $42.17, +4.80 pct
At least four brokerages raised their price targets on the remote-access software maker's stock, after the company forecast third-quarter revenue and profit above analysts' average expectation. The company's second-quarter results also beat expectations.
Two of 10 analysts covering the stock had a "strong buy" rating, while 6 had "buy." The analysts had median price target of $55.
** VODAFONE GROUP PLC, $34.1331, +1.86 pct
The world's second-biggest mobile operator reported another big quarterly drop in its main revenue measure, as weakness in South Africa and Spain offset stabilization elsewhere in Europe, and said a broader improvement is not expected until later in the year.
But analysts at Jefferies, who have a "hold" rating on Vodafone, said that given the stock's de-rating and dividend support, the market would focus on the positives on Friday.
** BRIGHTCOVE INC, $6.49, -36.81 pct
The online video publisher forecast third-quarter revenue below the average analyst estimate, citing the loss of a large customer.
Customer losses, lengthening sales cycles for larger deals and a shift to digital marketing would create headwinds for the company in the second half of the year and take a bite out of its growth outlook, RBC Capital Markets analysts wrote in note.
RBC, Raymond James, Pacific Crest Securities and B. Riley & Co cut their ratings on the stock.
** SWIFT TRANSPORTATION CO, $21.56, -16.47 pct
The trucking services provider reported a drop in earnings per share for the quarter ended June 30, due to driver shortages.
** EL POLLO LOCO HOLDINGS INC, $22.97, +53.13 pct
Shares of the quick-service restaurants operator rose as much as 59 percent in their market debut as investors tucked in, betting on the growing popularity of the restaurant chain's fire-grilled chicken.
** CHICAGO BRIDGE & IRON COMPANY NV, $64.1, -7.74 pct
Barclays cut its price target on the engineering and construction company's stock to $87 from $93. "Recent weak cash flow could limit investors' willingness to value (the company) at a premium vs. peers," the analysts said. The company reported better-than-expected results on Thursday.
** DATALINK CORP, $11.87, +19.18 pct
Needham & Co raised its price target on the datacenter management service provider's stock to $14.00 from $12.50. The stock's median price target was $13 according to Thomson Reuters data. Datalink forecast third-quarter adjusted profit and revenue largely above estimates, based on sales that did not close in prior quarters.
** COMPRESSCO PARTNERS LP, $22.945, -3.19 pct
The oilfield service provider priced an offering of 15.3 million units at $23.50 each, slightly below Thursday's close of $23.70.
The offering represents about 6 percent of company's total outstanding shares.
** PRIMERO MINING CORP, $7.96, +6.85 pct
Analysts at Cantor Fitzgerald upgraded the Canadian miner's stock to "buy" from "hold" and increased their price target to $9.35 from $9.25. The company also raised its gold price forecast for 2014 by 1.9 percent to $1,317 per ounce, while raising its gold price forecast for 2015 by 2.3 percent to $1,381 per ounce.
Spot gold price was around 1,298 per ounce on Friday afternoon.
** ABAXIS INC, $46.08, +9.51 pct
The medical product maker reported better-than-expected first-quarter results, driven by strong sales in the veterinary and medical markets.
Piper Jaffray said the results showed that the company had moved past a difficult year plagued by inventory timing issues. The brokerage raised its price target on the stock to $41 from $39. Canaccord Genuity also raised its price target to $40 from $39.
** LIFEPOINT HOSPITALS INC, $69.47, +6.08 pct
The hospital operator raised its full-year revenue forecast to $4.25 billion-$4.35 billion from $4 billion-$4.1 billion. The company also raised its full-year profit forecast to $2.99-$3.19 per share from $2.38-$2.78 per share, citing improving margins and recent acquisitions
Lifepoint also posted better-than expected second quarter results.
** LEAR CORP, $98.78, +3.13 pct
The maker of auto seats and electrical power systems beat Wall Street's earnings expectations for the second quarter and increased its full-year outlook. The stronger-than-expected results came despite weakness in South America and flat margins in the company's important seating business.
** BASIC ENERGY SERVICES INC, $25.17, -9.46 pct
Analysts said that second-quarter sales in most of the oilfield services provider's units were weak. The company's third-quarter revenue forecast fell short of the average analyst estimate.
** BJ'S RESTAURANTS INC, $35.33, +15.31 pct
The casual dining restaurant operator reported a better-than-expected second-quarter profit on Thursday, helped by new menu items and higher kitchen and operating efficiencies.
BJ's said it expected to expand its operating base by about 10 percent in 2015, with at least 15 new restaurant openings.
At least four brokerages raised their price targets on the stock to as much as $43. The median price target on the stock is $31.
** ALIGN TECHNOLOGY INC, $56.245, +5.66 pct
The dental products maker posted better-than-expected first-quarter profit and revenue due to strong demand for its invisible braces. The company also forecast third-quarter profit above than the average analyst estimate.
Jefferies & Co raised its price target on the stock by $5 to $60, the third-lowest price among the 11 analysts covering the company. The median target on the stock is $65, unchanged in the past 90 days, according to Thomson Reuters data.
** AON PLC, $87.01, -4.35 pct
The insurance broker reported an adjusted operating margin of 18.2 percent, down from 18.5 percent year earlier.
The company's revenue rose 1 percent to $2.91 billion, missing analysts' average estimate of $2.97 billion, according to Thomson Reuters I/B/E/S. Aon's adjusted net income attributable to shareholders was $1.25 per share, beating the analysts' estimate of $1.20.
** GLAXOSMITHKLINE PLC, $48.475, -3.20 pct
Britain's biggest drugmaker faced new allegations of corruption, this time in Syria, where the company and its distributor stand accused of paying bribes to secure business, according to a whistleblower's email reviewed by Reuters.
The company said it was investigating the latest claims, which date back to 2010.
** CYNK TECHNOLOGY, $2.5, -82.01 pct
The company's shares tumbled as trading resumed on Friday after a suspension from regulators, though the stock was not being traded publicly on exchanges but in private deals.
** HOMEAWAY INC, $35.98, +10.20 pct
The vacation rentals company reported better-than-expected second-quarter revenue and forecast third-quarter and full-year revenue above analysts' estimates, helped by higher average revenue per listing due to tiered pricing and bundled offerings.
Brokerage Raymond James cut its price target on the stock to $46 from $47. The median price target on the stock was $40.50.
** EPR PROPERTIES, $54.63, -10.15 pct
The real estate investment trust reported lower-than-expected second-quarter revenue and profit.
The mid-point of the company's full-year earnings forecast was also below the average analyst estimate.
** TEMPUR SEALY INTERNATIONAL INC, $56.21, -8.03 pct
The mattress maker's second-quarter profit fell short of the average analyst estimate.
The company cut its full-year adjusted EBITDA outlook, and reaffirmed its earnings outlook.
** INFORMATICA CORP, $30.69, -12.14 pct
The business software maker reported second-quarter revenue below the average analyst estimate and cut its 2014 adjusted profit forecast, citing acquisition-related expenses.
At least two brokerages cut their ratings on the company's stock, while at least eight brokerages cut their price targets. Eleven of the 20 brokerages covering the company rate the stock "buy" or higher, while the rest have a "hold" rating. The median price target on stock had fallen to $39 from $48 in the past 30 days, according to Thomson Reuters data.
** ACELRX PHARMACEUTICALS INC, $10.995, +7.58 pct
The specialty pharmaceutical company's shares rose in anticipation of U.S. approval for its pain drug device, Zalviso. The company clarified on Thursday that the U.S. FDA is expected to make a decision on July 27 after a rumor online that it had already won approval. Zalviso could be the company's first treatment to win U.S. marketing approval.
** ACACIA RESEARCH CORP, $17.35, +15.82 pct
The company, which buys and licenses patent rights, reported a second-quarter adjusted profit above analysts' expectations. The company's revenue more than doubled to $50.1 million.
The results should help nurture long-term confidence in the company's strategic shift toward faster ROI across a smaller portfolio of higher quality patents, analysts at Cowen and Co wrote in a note.
** SIBANYE GOLD LTD, $9.94, -9.47 pct
The South Africa-based gold miner said it expected first-half earnings to fall by as much as 52 percent, hit by an increase in the number of issued shares.
** UNIVERSAL HEALTH SERVICES INC, $103.67, +6.28 pct
The hospital operator posted better-than-expected second-quarter profit and revenue on Thursday on strong sales in its acute care and behavioral businesses.
"Healthcare reform and strength in the economy drove upside across both segments," Mizuho Securities analyst Ann Hynes said. Mizuho raised its price target on the stock to $115 from $104. The median analyst price target is $104.50, according to Thomson Reuters data.
** CALLAWAY GOLF CO, $8.02, -5.98 pct
The golf equipment maker reported a bigger-than-expected 70 percent fall in second-quarter profit as a rainy, cold spring delayed the golfing season.
High inventory levels and an increase in promotions also hurt sales.
** FREEPORT-MCMORAN INC, $38, +1.25 pct
The natural resources company clinched a deal with the Indonesian government on Friday allowing the miner to resume copper concentrate exports from the country, effectively ending a six-month tax dispute and paving the way for more miners to follow suit.
** NEWPARK RESOURCES INC, $13.43, +15.18 pct
The oilfield service provider reported a better-than-expected second-quarter profit, helped by strong demand for its mats that act as temporary roads on drill sites.
** PEARSON PLC, $19.32, +2.82 pct
The publishing group posted a 41 percent slump in first-half profit, reflecting increased restructuring charges, currency movements and the impact on margins of the phasing of revenues into the second half.
But the company, which makes over 70 percent of its revenue from educational publishing and also owns the Financial Times newspaper, said its outlook for the year was unchanged and raised its dividend 6 percent to 17 pence.
** DECKERS OUTDOOR CORP, $91.52, +7.38 pct
At least seven brokerages, including Credit Suisse, RBC Capital and Jefferies & Co, raised their price targets on the outdoor footwear and apparel maker's stock. The company reported a smaller-than-expected first-quarter loss, and its sales beat the average analyst estimate. The company also raised its fiscal 2015 sales and earnings growth forecast.
** PETROCHINA CO LTD, $138.92, -1.25 pct
China's largest energy producer is reconsidering a plan to auction off its multi-billion dollar natural gas pipeline unit, and could instead sell it to an affiliate, three people who were briefed on the matter told Reuters.
** RF MICRO DEVICES INC, $10.92, +3.70 pct
The chipmaker forecast quarterly results above market expectations, helped by higher demand for its chips that connect devices such as Apple's iPhone and Samsung Electronics Co's smartphones to networks.
** LIBERTY MEDIA CORP, $48.39, -1.12 pct
John Malone's Liberty Media started the process of spinning off its cable assets through a stock dividend to its shareholders to form a new listed company called Liberty Broadband.
** LATTICE SEMICONDUCTOR CORP, $7.01, -5.14 pct
The chipmaker forecast third-quarter revenue well below the analysts' average expectation, sending its shares down as much as 19.5 percent in extended trading.
Reporting By Shubhankar Chakravorty in Bangalore; Editing by Simon Jennings