After starting day on a down note, U.S. stocks rallied after comments by Federal Reserve Chair Janet Yellen revealed the central bank is treading carefully when it comes to boosting interest rates. In remarks made before the Economic Club of New York, Yellen emphasized the need for the Fed to be prudent before it proceeds with another interest rate increase, something the central bank declined to do earlier this month.
Though not overt, Yellen’s comments were likely seen by some traders as meaning the Fed will not hike rates at its April meeting, and that was enough to send the S&P 500 higher by 0.88% while the Dow Jones Industrial Average added 0.56%. The Nasdaq Composite rose 1.67%.
While the Fed was in focus once again today, that did not prevent Ambarella Inc (NASDAQ:AMBA), Keryx Biopharmaceuticals (NASDAQ:KERX) and Lennar Corporation (NYSE:LEN) from being three of the day’s best stocks.
Ambarella Inc (AMBA)
Shares of video chip manufacturer Ambarella soared 9.3% on more than double volume after Morgan Stanley raised its rating on the stock to “overweight” from “equal weight.” Morgan Stanley has a $55 price target on AMBA, implying upside of nearly 25% from where the stock closed Tuesday.
The bank believes AMBA can bolster its drone business, though it sees a competitive landscape, with AMBA potentially knocking heads with some of the largest semiconductor makers. Morgan Stanley also sees opportunity for AMBA with its computer vision chip due out later this year.
“Strategic value of a company’s markets has been a key driver of P/E multiples in the last year, given the rapid consolidation of the industry. Ironically, with a dominant position in a niche market, we don’t think that Ambarella’s core video processing capability has been considered strategic,” according an excerpt of Morgan Stanley’s note posted by Barron’s.
Keryx Biopharmaceuticals (KERX)
Keryx Biopharmaceuticals surged 8.6% as turnover topped eight times the daily average on news that the company’s drug aimed at treating patients suffering from iron deficiency related to chronic kidney disease proved successful in a late-stage trial.
The successful trial could open the door for KERX to gain wider approval of the drug.
“The initial results for the oral, iron-based drug were both statistically significant and clinically meaningful,” Reuters reports, citing KERX.
Shares of KERX are slightly lower on a year-to-date basis.
Lennar Corporation (LEN)
Homebuilder Lennar jumped almost 3.2% on more than double the average daily volume after the company reported fiscal first-quarter earnings that beat expectations.
LEN posted first-quarter earnings per share of 63 cents, up from 50 cents a share a year ago. That easily beat the 52 cents a share analysts expected LEN to earn. LEN’s first-quarter revenue climbed 21% to $1.99 billion. The total number of homes sold by LEN increased 12% to 4,806 during the quarter.
At the time of this writing, Todd Shriber did not own any of the aforementioned securities.
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