The U.S. dollar rose yesterday as stocks remained relatively flat, while the general sentiment is that the Federal Reserve will not raise short-term interest rates when it concludes its Federal Open Market Committee meeting today.
The S&P 500 and the Dow Jones Industrial Average were each a fraction higher at day’s end, while the Nasdaq Composite climbed 1% higher.
Several companies made a little noise after the bell on Tuesday, including KB Home (NYSE:KBH) and Microsoft Corporation (NASDAQ:MSFT). Meanwhile, Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) looks likely to enjoy another day of M&A-fueled gains on Wednesday.
Here’s what investors and traders should be looking for today:
Ariad Pharmaceuticals, Inc. (ARIA)
ARIA stock will continue to get some lift today on recent M&A speculation, if Wednesday’s premarket trading figures are to be believed.
Bloomberg reported yesterday that the oncology company might be taken over — granted, the speculation was simply through a few Twitter posts. Still, that was enough to start scorching shorts, who as of the last available data made up more than 18% of the float.
Technically speaking, ARIA shares are already screaming overbought. The stock has gone vertical for more than a week, and are well above any of its major moving averages. Moreover, the Relative Strength Index is sitting at over 83 — another overbought signal.
But the high RSI has persisted for days, and looks like it will yet again. Investors might also feel a little confident as Ariad’s fundamental picture looks increasingly better. ARIA is expected to lose just 9 cents per share this year after bleeding $1.23 in 2015.
ARIA shares were up 5% in premarket trade.
KB Home (KBH)
KBH stock is slipping this morning amid a miss on sales and amid worries about disappointing August housing figures.
KB Home earned 42 cents per share in its most recent quarter, topping the consensus estimate by 3 cents. The company also reported improvements in gross profit margin (20 basis points to 16.4%) and homebuilding operating income (43% to $51.5 million).
However, the homebuilder missed revenue expectations, posting $913.3 million in net sales versus a consensus mark of $954.1 million.
Also weighing on shares was a dip in residential housing starts. Starts were off nearly 6% to 1.14 million in August — worse than the expected 1.19 million, and lower than July’s rate of 1.21 million.
KBH shares were off 2% on Wednesday morning, cutting into a roughly 20% year-to-date advance.
Microsoft Corporation (MSFT)
MSFT shares are getting a slight boost this morning after the company announced a new stock repurchase program.
Microsoft plans on buying back $40 billion in MSFT stock, which closed Tuesday at $56.81. This plan will begin next year, after the current $40 billion plan is scheduled to be completed.
Microsoft also announced a hike in its dividend, from 36 cents quarterly to 39 cents quarterly, starting with the distribution set to be paid out on Dec. 8 to shareholders of record as of Nov. 17.
Based on the new payout, MSFT shares would yield 2.7%.
Microsoft’s stock is up more than 1% in premarket trade.
