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U.S. stocks are trading south of breakeven, as Wall Street takes its cues from Japan. Among the equities in focus include chipmaker NVIDIA Corporation (NASDAQ:NVDA), restaurateur Chipotle Mexican Grill, Inc. (NYSE:CMG), and financial firm Wells Fargo & Co (NYSE:WFC), which have all attracted the attention of analysts.
- NVDA is 1.2% higher at $14.58, despite a lukewarm "hold" initiation and $15 price target from Topeka Capital. However, the stock is struggling to climb back atop its 10-day moving average, breached for the first time since April 22 on Wednesday. From a sentiment standpoint, Wall Street is skeptical of NVIDIA Corporation, which boasts just seven "strong buys," compared to 18 "holds" and two "strong sells." Plus, the Schaeffer's put/call open interest ratio (SOIR) stands at a 52-week peak of 0.75, implying that near-term options players haven't been more put-biased at any other time during the past year.
- After touching a year-to-date high of $379.15 yesterday, CMG is taking a breather, giving up 1.3% to flirt with $366.68. Earlier in the session, Credit Suisse launched coverage of the equity with a "neutral" rating and a $360 price target, which represents a discount to CMG's current price. The stock is no stranger to skepticism, though. Despite outperforming the broader S&P 500 Index (SPX) by 9 percentage points during the past two months, Chipotle Mexican Grill sports just six "strong buys," compared to 14 "holds" and one "sell." Meanwhile, the equity's SOIR of 1.25 sits 16 percentage points from an annual acme, and short interest represents more than four sessions' worth of pent-up buying demand, at CMG's average pace of trading. As the security resumes its longer-trend ascent, a mass exodus of bears could translate into contrarian tailwinds.
- Finally, Guggenheim lifted its price target on WFC by $1 to $48, which represents expected upside of 20% from the stock's current perch of $39.98. The shares of Wells Fargo notched a four-year high of $41.10 yesterday, but have since pulled back to test their 10-day moving average -- a trendline that's contained all but one of WFC's daily closes since April 22. Additional price-target hikes could help the stock continue its uptrend, however. The average 12-month price target on WFC rests at $40.89 -- a stone's throw from the equity's current price.
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The Dow Jones Industrial Average (INDEXDJX:.DJI) is down 5 points, or 0.03%, to 15,301.84, pressured lower by lackluster data out of Japan and China, as well as concerns regarding the Fed's economic stimulus plans. According to the meeting minutes released by the Federal Open Market Committee (FOMC) yesterday afternoon, some officials could be ready to scale back current monetary easing measures as soon as next month. On a more upbeat note, the Labor Department said initial jobless claims fell by a larger-than-expected 23,000 last week to a seasonally adjusted 340,000. Additionally, the Commerce Department revealed that new home sales climbed by 2.3% last month to a seasonally adjusted yearly rate of 454,000 -- trumping economists' projections, and marking the second-highest level since July 2008.
Here are a few noteworthy stats at midday:
- The equity put/call volume ratio across all 11 options exchanges stands at 0.95, with 4.6 million calls traded so far today, compared to 4.3 million puts.
- Among the equities with heavy call activity is Halozyme Therapeutics, Inc. (NASDAQ:HALO), which has gained around 4.3% since the opening bell, after the biopharmaceutical company said David Ramsey will replace Kurt Gustafson as CFO. Currently, calls make up 88.1% of the security's intraday option volume. At last check, HALO was trading at $7.48.
- The Nasdaq shows an advance/decline ratio of 0.66, with the number of downward movers easily outpacing the advancers.
- Among the Nasdaq's major decliners is Cirrus Logic, Inc. (NASDAQ:CRUS), which has plummeted about 15.3% in intraday action, amid news that the firm has reworked its business model to reflect a weaker gross margin outlook. What's more, the tech concern said its fiscal-year sales will likely be hampered by an anticipated drop in average smartphone selling prices. CRUS is presently trading at $18.70.
- Bullish sentiment swelled for a fourth consecutive week last week, according to the latest Investors Intelligence survey. The percentage of financial advisors with a bullish view on stocks climbed to 55.2% from 54.2%, while the percentage bearish fell to 18.8% from 19.8%. Meanwhile, the percentage of advisors expecting a market correction remained flat at 26.0%.
- The CBOE Market Volatility Index (INDEXCBOE:VIX) is 0.2 point, or 1.2%, higher, to rest at 13.98.
- The put/call volume ratio on the iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX) -- which is currently hovering at 18.73 -- sits at 0.63, with calls outnumbering puts.
View a real-time chart of the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI).
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Analysts are weighing in today on cruise concern Carnival Corporation (NYSE:CCL), apparel retailer American Eagle Outfitters (NYSE:AEO), and tech issue ARM Holdings plc (ADR) (NASDAQ:ARMH). Here's a quick roundup of today's bearish brokerage notes.
- Down more than 11% so far this year to linger in the $32.55 neighborhood, CCL saw its price target reduced to $33 from $37.50 at Jefferies today, amid news that the company's credit rating is under review with Moody's Investors Service. The equity has also trailed the broader S&P 500 Index (SPX) by almost 15 percentage points during the past three months, yet bearish speculation on Carnival Corporation is relatively low right now. In fact, short interest accounts for less than 2% of the security's available float, pointing to a meager amount of sideline cash. In other words, CCL is unlikely to benefit from any short-covering activity in the near term.
- AEO -- which sits just below breakeven year-to-date to hover at $20.02 -- received a price-target cut to $22 from $23 at UBS this morning, after reporting a 30% decline in first-quarter profits on Wednesday. (However, analysts at Janney raised their price target by $2 to $23.) Elsewhere, Schaeffer's put/call open interest ratio (SOIR) for American Eagle Outfitters checks in at 1.88, with puts almost doubling calls among options scheduled to expire within the next three months. This ratio is just 1 percentage point shy of an annual high, conveying short-term traders have rarely been more bearishly aligned toward the stock during the last 12 months.
- Despite a year-over-year gain of almost 93% to trade at $44.38, ARMH was downgraded to "neutral" from "outperform" at Exane BNP Paribas in pre-market activity. This pessimistic attitude toward the stock is prevalent in the options pits, as well. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day put/call volume ratio of 2.79 for ARM Holdings plc (ADR), confirming traders have bought to open nearly three puts for every call during the past two weeks. This ratio ranks higher than 76% of similar annual readings, reflecting a healthier-than-usual appetite for puts over calls lately.
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Analysts are weighing in today on computer giant Hewlett-Packard Company (NYSE:HPQ), aerospace firm The Boeing Company (NYSE:BA), and office products retailer Staples, Inc. (NASDAQ:SPLS). Here's a quick roundup of today's bullish brokerage notes.
- Up almost 49% so far this year, HPQ was in the bullish spotlight this morning, after reporting stronger-than-anticipated quarterly earnings post-close Wednesday. Jefferies upgraded the stock to "hold" from "underperform," and lifted its price target to $24 from $18.50, while brokerage firms including J.P. Morgan Securities, RBC, Credit Suisse, Evercore, Deutsche Bank, FBN Securities, and BMO also boosted their price targets. Nevertheless, sentiment among the analyst crowd remains bearishly slanted. Hewlett-Packard Company maintains only two "buy" or better ratings, compared to 15 "holds" and six "sell" or worse suggestions. What's more, the equity's average 12-month price target of $19.65 reflects a discount to Wednesday's closing price of $21.23. In other words, another round of upgrades and/or price-target hikes could be on the horizon for the stock, which is set to open more than 10% higher.
- BA -- which has advanced about 30% in 2013 and is presently priced at $97.93 -- saw its price target raised to $120 from $105 at Oppenheimer ahead of the opening bell, after China cleared the company's 787 Dreamliner for commercial service. The stock has also bested the broader S&P 500 Index (SPX) by nearly 16 percentage points over the past 60 sessions, which could explain the call-skewed activity in the short-term options pits. Schaeffer's put/call open interest ratio (SOIR) for The Boeing Company checks in at 0.64, with calls easily outpacing puts among options with a shelf-life of three months or less. This ratio ranks in the 11th percentile of its annual range, confirming near-term traders have rarely been more call-heavy toward the security during the past year.
- SPLS scored price-target hikes at Citigroup (to $16 from $13) and Bernstein (to $14 from $13) today, despite falling short of consensus earnings estimates yesterday. However, the company stood by its full-year guidance and said it expects sales to grow throughout the year. The equity has gained about 33% year-to-date to hover at $15.17, yet there is still plenty of skepticism levied against Staples, Inc. The security's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio sits at 3.65, indicating puts bought to open have more than tripled calls during the past two weeks. This ratio is just 8 percentage points shy of a yearly peak, meaning traders have been snapping up puts over calls at a near annual-high clip.
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It could be a bumpy ride for bulls today; futures are pointed south after a broad sell-off overseas and mixed messages from Federal Reserve officials on Wednesday.
- Hewlett-Packard Company's (NYSE:HPQ) fiscal second-quarter earnings came in at 87 cents per share, excluding items, beating the consensus forecast of 81 cents per share. The computer maker also reaffirmed full-year earnings-per-share guidance of $3.50 to $3.60, and raised its dividend to 14.5 cents per share. The stock is up over 10% in pre-market trading. (Forbes)
- J.C. Penney Company, Inc. (NYSE:JCP) will receive a $2.25 billion loan from Goldman Sachs Group, Inc. (NYSE:GS) -- $500 million more than was initially anticipated -- to help the retailer get back on track. With the infusion of cash, CEO Mike Ullman plans to restore brands and items that previous CEO Ron Johnson had eliminated, much to the dismay of shoppers. (CNBC)
- Yesterday, Tesla Motors Inc (NASDAQ:TSLA) paid back its $465 million clean energy loan from the U.S. Department of Energy -- nine years earlier than was required. The electric automaker has seen its share price increase by more than 150% year-to-date, and its Model S sell more quickly than anticipated, both of which factored into the rapid payoff. (CNET)
- Ford Motor Company (NYSE:F) is closing its manufacturing plants in Broadmeadows and Geelong, Australia, due to increasing costs in the country. The move, effective in October 2016, will result in about 1,200 workers losing their jobs. (ABC News)
- Amazon.com, Inc. (NASDAQ:AMZN) is bringing its Kindle Fire tablet to 170 countries and making its Appstore available in 200 countries. Until now, the online retailing giant's Appstore only functioned in a handful of global destinations, including Japan and the U.K. Amazon hopes this worldwide expansion will attract not only more customers, but more developers, as well. (TechCrunch)
- Multi-hyphenate Jennifer Lopez has another project on her plate -- wireless company Viva Movil, which is geared toward the Latino market. Ms. Lopez will work with Verizon Communications' (NYSE:VZ) Verizon Wireless unit on the new entity, serving as its chief creative officer to spearhead the marketing process. First up is a bilingual website (launching today), and three retail stores, opening in New York, L.A., and Miami, with more to follow. (CNBC)
- Hormel Foods Corporation (NYSE:HRL) released fiscal second-quarter earnings that fell short of analysts' expectations. Per-share results came in at 46 cents per share, three cents shy of the Street's consensus view, while sales rose almost 7% to $2.15 billion, narrowly missing the $2.19 billion estimate. (Reuters)
- Finally, plus-sized blogger Jes M. Baker has published a series of photos spoofing print ads from Abercrombie & Fitch Co. (NYSE:ANF) and stamped with the alternative branding "Attractive & Fat." The retailer has faced harsh criticism due to recently surfaced 2006 comments from its CEO Mike Jeffries. He defended the chain's decision to carry only relatively small sizes (nothing above a women's size 10) by quipping that ANF clothes are for "cool kids" with "a lot of friends." ANF earnings are expected tomorrow before the open. (Yahoo!)