The Battle Behind the Market’s Direction (CIEN, P, TRCR, NUAN, NFLX, AAPL, OUTD, CSIQ)
Stocks rebounded today, helped by a better-than-expected ADP jobs number and optimism on the Greek debt-restructuring front. Right now, the market is in a battle of improving U.S. jobs data versus weakening global economic data. In the end, we think the U.S., as still the consumption engine of the world, can win out and help bolster the global economy instead of being drug down. However, after a strong run in the market since the fall, we would expect a typical bull market pullback, whether it be now or a sell in “May” type of event.
The Events and Themepark Stocks Index was the top performing tickerspy Index on the day, led by Outdoor Channel Holdings (OUTD) with a 21% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with Canadian Solar (CSIQ) down -13%.
Stocks rose on the day, led by a 25-point, or 0.9%, jump in the Nasdaq to 2,936. The Dow climbed 78 points to 12,837, while the S&P advanced 9 points to 1,353. Oil rose $1.46 to $106.16 a barrel, while gold added $11.80 to $1,683.90 an ounce.
In economic news, ADP said the U.S. economy added 216,000 new private sector jobs last month. Economists had expected a reading of 208,000. Meanwhile, the Labor Department said worker productivity climbed 0.9% in the fourth quarter, but labor costs rose 2.8% during the quarter. The Labor Department releases its monthly jobs report on Friday.
In earnings news, communications equipment maker Ciena (CIEN) said its fiscal first-quarter loss narrowed to -$47.7 million, or -49 cents per share, from -$79.1 million, or -84 cents per share, a a year earlier. On an adjusted basis, the company lost -17 cents per share. Revenue fell -4% to $416.7 million. Analysts expected a loss of -4 cents on revenue of $426.2 million. Ciena forecast revenue for the current quarter of $435-$460 million. Analysts were expecting $450.6 million. Shares of Ciena rose 4.2%.
Shares of Pandora Media (P) plunged -23.9% after the online music provider said its fourth-quarter loss more than doubled year over year. Pandora posted a loss of -$8.2 million, or -5 cents per share. A year earlier as a private company, Pandora lost -$3.9 million. Revenue jumped 71% to $81.3 million. On an adjusted basis, Pandora lost -3 cents, but analysts expected a loss of -2 cents. The company expects to lose -18 to -21 cents a share on revenue of $72-$75 million in the current quarter. Analysts were expecting a loss of -2 cents per share on revenue of $86.5 million. Two pros counted Pandora among their top holdings at the end of Q4 and nearly 60 tickerspy members own the stock in their portfolios.
Shares of medical transcription firm Transcend Services (TRCR) surged 39.2% after Nuance Communications (NUAN) announced it will acquire the company for $300 million. The deal price represents a 41% premium to Transcend’s closing price on Tuesday. Nuance estimated that the deal would boost its fiscal 2013 revenue by $140 million to $150 million, and add 8 to 9 cents per share to its adjusted earnings.
According to Reuters, Netflix (NFLX) has been in talks with major cable companies to allow its streaming content to be accessed through their set-top boxes. The company is trying to position itself as an alternative to HBO, according to the report. Separately, the company announced a partnership with Apple (AAPL) where its HD streaming service will be available via the newest version of Apple TV. Shares of Netflix fell -1.8%. Ten pros counted Netflix among their top holdings at the end of Q4 and more than 1,100 tickerspy members own the stock in their portfolios.
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