After a strong start, U.S. markets struggled to keep their heads above water the remainder of the day, and then simply broke down near the finish. Despite a pretty good jobs report, a smaller decline in crude oil prices than recently and some stabilization in China’s stock market, traders were selling into the early rally and thus the general indices never had any real momentum.
In China, markets were up nearly 2% and the People’s Bank of China tried to reassure investors by saying they would try to keep the yuan midpoint stable. That was good news for the rest of the world.
The big story in the U.S. was the Labor Department reporting that 292,000 jobs were created in December and the unemployment rate held steady at 5%. But average hourly wages held steady and did not rise as economists had expected.
Most traders were happy with this report, as it lowered any fears of recession, and yet did not seem to indicate we would get further interest rate hikes any time soon. But it did not seem to help much, as traders did not want to be long before the weekend.
The Dow Jones Industrial Average finished a dismal week down 1%, while the S&P 500 was off 1.1%. The Nasdaq was down 1% as well. Every sector was in the red, and basic materials were the weakest group of all.
For sure there were no huge gainers today, but Apple Inc (NASDAQ:AAPL), Cirrus Logic, Inc. (NASDAQ:CRUS) and Sunedison Inc (NYSE:SUNE) did buck the trend, finishing as three of today’s best stocks. Here’s how it happened:
Apple Inc (AAPL)
Apple was up less than 1% today — not the most screaming win on Wall Street, but a rare breath of relief after losing 8% in the first four trading days of the year.
However, that performance isn’t coming on any particularly good news. In fact, AAPL was just downgraded from $160 to $146 a share by Canaccord Genuity Group Inc. This comes on the heels of two other downgrades from UBS and RBC, both of whom are worried about sales of the iPhone. They each believe March production will fall, with projections of anywhere from 15% to 26% year-over-year.
The negativity has been sparked by a report from Apple suppliers that, based on orders, think iPhone 6s and iPhone 6s Plus production could decline by as much as 30%. Per Fortune, “The report also claims, without identifying its sources, that inventories of the iPhone 6s and 6s Plus, have ‘piled up’ at retailers in China, Japan, Europe and the U.S.”
So Apple investors, at least for one day, had a little bit to cheer about.
Cirrus Logic, Inc. (CRUS)
CRUS stock got some indirect assistance from AAPL today. Pacific Crest raised its outlook on CRUS from “sector weight” to “overweight,” saying that iPhone 7 sales using CRUS earbuds will help Cirrus Logic, and takes precedence over CRUS’ preliminary third-quarter revenue cut from a range of $370 million to $400 million, to $347 million.
That big slice in forward guidance sent CRUS shares down by 10% on Thursday, but share prices rebounded almost 4% today after Pacific’s mention. In addition, Jim Cramer also noted on CNBC that CRUS may have a predominant role with the iPhone 7.
Sunedison Inc (SUNE)
One day after a 39% shellacking, SUNE was back strongly on the basis of two analyst upgrades, finishing up nearly 3%.
Yesterday, SUNE shares took a nosedive after announcing a new, complex debt-restructuring plan that the street did not care for at all. But today, SUNE received upgrades from Avondale Partners and Axiom Securities. Avondale lifted its view from “market perform” to “outperform,” and Axiom was a bit less enthusiastic, raising its rating from “sell” to “hold.”
SUNE stock has been on a rollercoaster ride since the end of November, blistering up from near $2.50 to a high of $6.74, only to be cut in half again. This stock is definitely not for the faint of heart.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
