Stocks were mixed at the start of trading Tuesday as tech stock downgrades weighed, but Caterpillar (CAT) rose on an analyst upgrade.
The Nasdaq was up 0.1% as the Dow Jones industrial average and S&P 500 dipped 0.1%.
Early Stir: Caterpillar, Alphabet, Conn’s, Nvidia
Dow component Caterpillar rose 1%. Goldman Sachs added the maker of earth-moving equipment to its conviction buy list and assigned it a price target of 120. Cat has been posting tight weekly closes, a sign of institutional support as it works to shape a bottom to its seven-week consolidation.
Visa (V), JPMorgan (JPM) and Goldman Sachs (GS) were lower in the Dow. Each fell less than 1%.
Among the last few stragglers in the fourth-quarter reporting season, Conn’s (CONN) soared 31% after delivering mixed results. Earnings topped targets by a wide margin, but revenue missed. Management projected the company would return to full-year profitability in fiscal 2018.
Small biotechs were once again punching out some significant early moves. Paratek Pharmaceuticals (PRTK) rocketed 28% after it reported that a Phase 3 clinical trial of its pneumonia treatment Omadacycline met primary and secondary targets. Cyclacel Pharma (CYCC) shot up 18%. The New Jersey-based drugmaker reported an independent study demonstrating therapeutic potential in the company’s CYC065 as an anti-cancer agent.
Alphabet (GOOGL) fell less than 1% after BMO Capital trimmed the stock to market perform from outperform and lowered its price target to 880 from 1,005. The downgrade followed news reports late Monday on more details emerging in Google’s accusation that former executive Anthony Levandowski and others stole technology to develop the driverless auto technologies.
Alphabet shares are fighting to hold support at their 10-week moving average, after falling below an 867.10 buy point in a flat base.
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Among IBD 50 stocks, Nvidia (NVDA) dropped nearly 5% at the open. The chipmaker received a downgrade to underweight from sector weight from Pacific Crest Securities based on the company’s broad penetration of its available markets. Pacific Crest has no price target on the stock.
IBD 50 stock Mondelez International (MDLZ) jumped 0.9% after Goldman Sachs upgraded the stock to buy, from neutral. Shares are trading below their 10-week moving average in a flat consolidation.
Kate Spade (KATE) tanked 14% at the open on reports that the company may take additional time to contemplate a takeover offer from Coach (COH). Kate Spade shares jumped nearly 30% in February, boosted by word that both Coach and Michael Kors (KORS) were contemplating bids.
Trade Balance Narrows; Coming Up: Factory Orders
The U.S. trade gap narrowed to $43.6 billion in February, the Commerce Department reported. That was down from $48.5 billion in January — a bigger move than the dip to $44.5 billion projected by economists. The deficit has been up and down since December, following a three-month advance.
The Commerce Department reports February factory order estimates at 10 a.m. ET.
Oil prices rose, sending West Texas Intermediate up 0.5% and holding still below $51 a barrel. Gold gained a half percent and hovered near $1,261 an ounce. The dollar was mixed, up vs. the euro, down against the yen. The 10-year yield added 1 basis point to 2.33%.
In international markets, stocks gained in China on Tuesday with Hong Kong’s Hang Seng Index adding another 0.6%. In Japan, Tokyo’s Nikkei 225 dropped 0.9%.
Europe’s markets were mixed in afternoon trade. London’s FTSE 100 climbed 0.4%, while benchmarks in Paris and Frankfurt held thin losses.
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