Deutsche Bank Bullish on Hershey, Telecom Coverage
Deutsche Bank Bullish on Hershey, Telecom Coverage
Closing Bell: Netflix Hikes Prices; Stocks Jump on Fed Minutes
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Facebook and Boeing get upgrades, Deutsche Bank reiterates their bullish call on Hershey and Sanford Bernstein restarts coverage of telecom companies.
Stocks broke free of range-bound trading in the final hour to rally into the close as a March rate hike grew more likely. Netflix (NFLX) boosted the S&P 500 and Nasdaq after raising the price of its streaming service by a $1 a month. The increase will apply only to new customers who sign up for a plan. Similar price increases were rolled out in Europe in August. Increased downside risks in September encouraged members to delay a rate hike last month, according to the Federal Reserve's September meeting minutes. Members said it would be 'prudent' to wait until risks eased before tightening monetary policy for the first time in a decade. That increased the likelihood of a 2016 hike.
Stocks were narrowly mixed on Thursday as the Nasdaq pulled back from Wednesday's modest gains ahead of the kickoff of earnings season. Domino’s Pizza (DPZ) was weighing on markets after quarterly sales and profit fell short of estimates because of the impact of a stronger U.S. dollar. The pizza chain has been behind an international push, opening nearly 200 locations, mostly overseas, over the quarter. Lumber Liquidators (LL) climbed on news it will pay $10 million to settle five alleged violations it knowingly sourced illegal wood products. Deutsche Bank (DB) was on watch after the bank said it would take a charge of nearly 6 billion euros in the third quarter, tied to higher regulatory requirements in its corporate banking unit.
In Thursday's Analysts' Actions, Wall Street analysts are giving Nike (NKE), McDonald's (MCD), and Chipotle Mexican Grill (CMG) a thumbs up. D.A. Davidson upgraded Nike to BUY from NEUTRAL with a $140 price target. The company had a strong fiscal year 2015 and its earnings growth potential in 2016 looks 'promising as ever.' Investors will reap the benefits as the brand continues to get stronger. Analysts added that the company deserves a premium valuation. In another note, SunTrust began coverage of McDonald's with a BUY rating and a $117 price target. The firm applauded CEO Steve Easterbrook, and said he has a track record for successfully turning-around companies. The testing of its new 'Lovin' Value Menu,' which offers consumers a range of small side plates, is a big positive for the company. Last, the same firm started coverage of Chipotle with a BUY rating and an $850 price target. Analysts said the company has more sales levers than in the past, thanks to marketing and new initiatives. Overall, strong same-store sales are expected to boost Chipotle's sales growth. The firm is bullish as it appears that the company will perform well in 2016. TheStreet's U-Jin Lee reports in New York.
U.S. stocks opened lower Thursday as Investors consider what could be one of the largest tech mergers in history. Dell is talking to EMC (EMC) about a merger. As of Wednesday's close, EMC was valued at $50 billion. With a merger, EMC would be able to quiet its critics who are pushing for change at the company and Dell could expand into the cloud space. Wall Street is also looking to the Federal Reserve minutes, which will be released this afternoon. Although the minutes won't reflect the Central Bank's view on last Friday's weak jobs report, it may mention overseas events particularly China. Alcoa's (AA) 3rd quarter results are sue after the market close. It will market the unofficial launch of what is projected to be the weakest earnings reporting season for the S&P 500 companies in 6 years. It will also be the first earnings report from Alcoa since announcing it would split the company in two.
Dell is in talks to buy EMC (EMC). If it happens it would be one of the largest tech deals of all time. Reuters reported that Dell was in talks with banks about raising debt financing for an all-cash offer for EMC, which had a market cap of $50 billion as of Wednesday's close. Analysts say Dell would buy EMC as PC sales slow and to expand its cloud business. The UAW reached a tentative deal with Fiat Chrysler (FCAU) on a new contract. The agreement was announced minutes after the midnight deadline. The 4 year contract must be ratified by a vote by Fiat Chrysler's 40,000 union workers in the United States. The UAW Chrysler Council will meet in Detroit tomorrow to discuss and vote on the agreement. Blackstone Group is buying BioMed Realty (BMR) for $8 billion. Blackstone says it believes BioMed's high quality real estate in the life sciences industry is poised for growth. Alcoa kicks off the 3rd quarter earnings season after the close today.
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