A late-day selloff for stocks capped an end to a dreary day, spoiling what was otherwise a fairly solid week on Wall Street.
Earlier on, markets were presented with sad news out of Saudi Arabia, as King Abdullah passed away, and his brother Salman was crowned the new King. Initially the news helped buoy oil prices slightly on hopes for a decrease in production, but by the end of the day, his death had little impact upon Brent, while crude prices were down 2%. Elsewhere, the National Association of Realtors (NAR) reported a 2.4% rise in existing home sales for December to an adjusted annual rate of 5.04 million, close to the 5.08 million expected.
The Dow Jones Industrial Average slid 0.79%, while a slightly better S&P 500 lost 0.55%. The Nasdaq was the lone stalwart, finishing just above the breakeven mark.
However, while most sectors were in the red today, Starbucks Corporation (NASDAQ:SBUX), Pandora Media Inc (NYSE:P) and Array Biopharma Inc (NASDAQ:ARRY) beat the market by a mile to sit among the day’s best stocks.
Starbucks Corporation (SBUX)
SBUX stock investors enjoyed their best day in 18 months, with shares of SBUX gapping up more than 6% on 16.7 million shares after reporting solid first-quarter earnings.
Adjusted earnings per share of 80 cents were in line with analysts’ expectations, and 13% higher year-over-year. Same-store sales were up 5%, with traffic increasing by 2%, and the average purchase price rising 3%. Christmas gift card sales were particularly strong as well.
JPMorgan Chase raised its price target from $89 to $91, while Wedbush Securities lifted its outlook for SBUX stock from $90 to $100.
Momentum Options Editor Rick Rouse was spot-on a few days ago, recommending investors to buy call options ahead of the earnings report.
Pandora Media Inc (P)
The online music provider saw its shares surge more than 10% after Rosenblatt Securities initiated coverage of P stock with a “buy” rating and target price of $20. The analyst noted that Pandora’s ad load rate has been increasing, while still remaining well within tolerable levels. Pandora CEO Brian McAndrews recently said that overall listening hours by Pandora customers has risen 25% year-over-year.
However, P stock has really struggled lately, falling from $28 last September to a recent low just above $15. Pandora will be reporting earnings Feb. 5 after the closing bell.
Array Biopharma Inc (ARRY)
A pact formalized between ARRY and Novartis AG (ADR) (NVS) in which Array Biopharma would buy worldwide rights to cancer treatment Encorafenib from Novartis blasted ARRY stock more than 40% higher today to multiyear highs on 34.4 million shares.
The deal is conditional upon Novartis first closing some other arrangements with British pharmaceutical giant GlaxoSmithKline plc (ADR) (GSK). No financial information was revealed by either company concerning the deal, except to say that payments were “minimal.”
Encorafenib is in a late-stage clinical trial, and is being studies for its effectiveness when combined with binimetinib, a treatment for advanced melanoma. The late-stage trial is often the last phase before a company seeks approval from the Food and Drug Administration (FDA).
As of this writing, Ethan Roberts did not hold any positions in the aforementioned securities.
