The S&P 500 and Nasdaq Composite touched new intraday highs Wednesday after the minutes from the April FOMC meeting seemed to suggest again that it’s in no hurry to raise interest rates, but trailed off to join the Dow Jones Industrial Average in a flat finish.
Markets were again watching mixed retail store earnings, with Target Corporation (NYSE:TGT) beating analysts’ estimates, Staples, Inc. (NASDAQ:SPLS) meeting estimates and Lowe’s Companies, Inc. (NYSE:LOW) missing on estimates.
However, the highlights of the day came from Cablevision Systems Corporation (NYSE:CVC) American Eagle Outfitters (NYSE:AEO) and Yahoo! Inc. (NASDAQ:YHOO) on a mix of earnings and M&A news.
Here’s why AEO, CVC and YHOO are three of today’s best stocks:
Yahoo! Inc. (YHOO)
YHOO stock rebounded more than 4% a day after shares tanked late amid worries that its spinoff of Alibaba Group Holding Ltd (NYSE:BABA) could possibly be a victim of some IRS changes. The IRS said it was considering possible changes to spinoff taxation, and investors reacted by quickly selling YHOO shares off Tuesday.
By Wednesday, however, Yahoo said the Alibaba spinoff would not, in fact, be taxed, and YHOO rose in relief.
In other Yahoo news, CIO Mike Kail resigned and will be replaced by Laurie Mann, who has been employed with Yahoo in different capacities over the last 10 years. Kail worked for Netflix, Inc. (NASDAQ:NFLX) from 2011 until the summer of 2014, when he left to work at Yahoo. In November, 2014, NFLX sued Kail in Santa Clara County Superior Court, saying he had committed fraud, unjust enrichment, breach of fiduciary duty and other unethical behavior.
NFLX said it learned after he left that he was being paid commissions by two third-party vendors that ranged between 12% to 15% of the total monthly fees that Netflix was paying these companies.
Cablevision Systems Corporation (CVC)
CVC stock jolted 18% higher as the M&A waters churned on news that French-based Altice SA (OTCMKTS:ATSVF) had begun talking to Time Warner Cable Inc (NYSE:TWC) about a potential deal.
CVC also received an upgrade by Pivotal Research Group, which boosted its rating on Cablevision from “hold” to “buy,” though the price target of $31 remained unchanged.
Lastly, CVC announced yesterday that it’s suing rival Verizon Communications Inc. (NYSE:VZ) over false advertising regarding its FIOS service, saying that VZ uses coaxial cable, and not fiber optic cable, in New York City residences.
Investors obviously had a lot of CVC news to digest in a short period of time, and they liked what they heard.
American Eagle Outfitters (AEO)
American Eagle stock rose more than 5% today after first-quarter results beat Street estimates. AEO earnings of 15 cents per share topped expectations by 3 cents, and revenues that grew 8% year-over-year to $700 million topped the consensus mark of $692 million.
AEO also provided second-quarter earnings guidance in a range of 11 to 14 cents per share, with analysts looking for 11 cents.
Wednesday’s run in AEO stock sent shares up 40% since early December.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
