Stocks Lower on Chinese Trade Data! Stocks on Wall Street were lower at midday following disappointing economic data from Asia and a slide in shares of Dow member Boeing (BA). Boeing’s drop put immediate pressure on the Dow as soon as trading began and the selling picked up momentum. At its low point of the morning, 29 of the 30 Dow stocks were lower and the index had racked up a triple digit loss. The market improved as the morning progressed, but the major averages all remained in the red as the lunch hour arrived.
ECONOMIC EVENTS: In the U.S., no major economic data was reported. In Asia, China unexpectedly posted a trade deficit of about $23B in February as overseas shipments slid 18.1% compared to the same month last year. As a results, China cut the yuan’s (its currency) reference rate by 0.18 percent, the most since July 2012. Also, Japan downwardly revised its estimate of economic growth in the fourth quarter to 0.2% from the government’s preliminary 0.3% expansion estimate.
COMPANY NEWS: Shares of Boeing (BA) were the Dow Jones Industrial Average’s worst performer after The Wall Street Journal reported late Friday that the airplane maker has discovered cracks in some 787 Dreamliner wings which will lead to a delay in the delivery of some aircraft. Boeing led all decliners on the Dow with a nearly 2.5% pullback near noon… Another Dow member, McDonald’s (MCD), was weak early in the session but had recovered to be flat at midday. The world’s largest fast-food restaurant company reported that its same-store sales declined 0.3% globally in February, with U.S. comparable sales decreasing 1.4%… FMC Corporation (FMC) jumped more than 5% after announcing plans to separate into two independent public companies. “New FMC” will be comprised of the company’s Agricultural Solutions and Health and Nutrition segments, which will be split from FMC’s current Minerals segment. Jefferies raised its price target on FMC shares to $95 from $84 after the announcement, which the firm views as an incremental positive.
MAJOR MOVERS: Among the notable gainers was Montage Technology (MONT), which surged 20% after the company received a $21.50 per share acquisition proposal from China’s state-owned Shanghai Pudong Science and Technology. Also higher was Chiquita Brands (CQB), which rose 12% after agreeing to combine with another fruit company, Ireland’s Fyffes, to form a new company that will be 50.7% owned by Chiquita stockholders. Among the noteworthy losers were 3D printer makers 3D Systems (DDD) and Stratasys (SSYS), which fell 5% and 3% respectively after Barron’s contended that the stocks in the sector are hyped, don’t have much potential, and are overvalued. .
Twitter rises after analyst hikes price target – Shares of Twitter (TWTR) are advancing in today’s down market after research firm MKM Partners raised its price target on the stock to $72 from $50 in a note to investors earlier today. WHAT’S NEW: Twitter’s revenue growth is likely to accelerate, causing the stock to rise further, MKM analyst Rob Sanderson wrote. By 2020, Twitter’s revenue will reach $15B, while the company’s operating margin will be 40% that year, he believes. Meanwhile, Twitter is facing near-term user growth issues and must generate significant user growth to justify its valuation, warned Sanderson. However, investors seem to be giving the company 2-3 more quarters to expand its user base, added the analyst, who kept a Buy rating on the shares. WHAT’S NOTABLE: On February 27, research firm eMarketer predicted that the growth of Twitter’s user base in the U.S. would fall below 10% this year and slow to 6.4% by 2018. PRICE ACTION: In morning trading, Twitter added 41c to $53.94.