U.S. markets roared back today after yesterday’s decline, with gains coming mostly in the large-cap stocks. Biotech stocks, which have been correcting in recent days, had a small bounce as well.
The April manufacturing ISM index came in at 51.5, which was unchanged from the previous month, although the Street was expecting a small increase to 52. Also, construction spending for March declined 0.6%.
The Dow Jones Industrial Average gained 1%, the S&P 500 was 1.1% higher and the Nasdaq Composite was up 1.3%. All of the sectors were higher, with basic materials and healthcare the two leading groups on the day.
Earnings and analyst upgrades continue to propel many stocks higher. A few that benefited from those positives today were Alcoa Inc (NYSE:AA), Gilead Sciences, Inc. (NASDAQ:GILD) and Ocwen Financial Corp (NYSE:OCN), and those were three of today’s best stocks.
Alcoa Inc (AA)
AA stock roared 5.4% higher today after Standpoint Research upgraded Alcoa from “hold” to “buy” while setting an $18 price target.
In addition, the Alcoa board of directors declared a quarterly dividend of 3 cents a share, payable May 25, to holders of record at the close of business on May 11. The dividend has been the same since 2009.
Alcoa also announced that Dr. Judith Gueron, a longtime director of the company, was retiring and will be succeeded by Patricia Russo, a member of the board since 2008.
Gilead Sciences, Inc. (GILD)
GILD stock pushed 4.5% higher today after reporting first-quarter earnings of $2.89 a share, ahead of estimates for $2.78 a share and far exceeding the $1.44 that GILD earned in the same quarter a year ago. Revenue of $7.6 billion was far ahead of the Street’s estimate of $6.8 billion and a nice increase from $5 billion in the first quarter of 2014.
Much of GILD’s success this quarter was attributed to sales of their hepatitis C virus (HCV) drug, Harvoni, and to its various HIV treatments.
GILD stock had been trading sideways for most of 2015. Today’s action puts it near the top of its range — in light of the positive earnings report, a possible breakout could be forthcoming.
Ocwen Financial Corp (OCN)
OCN stock was one of the biggest winners on the day, blasting up 20.8% on 13.8 million shares. Late on Thursday, Ocwen reported preliminary first-quarter earnings of 27 cents a share on revenue of $510.4 million — far exceeding analysts’ estimates of 13 cents a share on $488 million in revenue.
In addition, Sterne Agee raised its rating on OCN from “neutral” to “buy” and increased its price target from $10 to $12 a share.
It’s been a difficult year for Ocwen with OCN stock dropping from $22 in December to below $6 in February. With today’s rally, OCN stock closed at $10.25.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
