U.S. markets rallied again on a quiet day — featuring just a few minor economic reports — that was driven mostly by a boost in energy prices. Crude oil was up nearly 4% after a strike among Brazilian oil workers was said to be curbing production in that area.
Investors are looking ahead to speeches from Federal Reserve Chairwoman Janet Yellen and a few other Fed policymakers on Wednesday, as well as the employment report on Friday, for further market direction.
In economic news, U.S. factory orders declined by 1% in September after declining in August, but this was offset by a robust auto sales report for October. Fiat Chrysler Automobiles NV (NYSE:FCAU) in particular said its sales will easily top analysts’ forecasts.
The Dow Jones Industrial Average gained 0.5%, the S&P 500 rose 0.3% and the Nasdaq finished up 0.4%.
Earnings and stronger oil prices put Visa Inc (NYSE:V), Chevron Corporation (NYSE:CVX) and Pioneer Natural Resources (NYSE:PXD) among Tuesday’s best performers. Here’s a quick look at the specifics behind each strong move:
Visa Inc (V)
Tuesday was a busy day for credit card merchant Visa, which was upgraded by a Bank of America analyst a day after V reported earnings and announced a major deal.
Visa’s fiscal fourth-quarter profits of 62 cents per share matched Zacks estimates, as did revenues of $3.6 billion, which were up 11% year-over-year. Visa also announced the authorization of a new $5 billion stock repurchase program.
Visa also said it would buy former subsidiary Visa Europe Ltd for $23.3 billion. Visa will issue $16 billion in debt to fund the deal, which Visa hopes will become accretive to its bottom line by 2017.
BofA’s Kenneth Bruce upped his price target from $78 to $85 and maintained his “buy” rating on V stock. V shares rallied 3.6% in response.
Chevron Corporation (CVX)
A strong day in the oil sector, fueled by the Brazilian oil workers strike, sent CVX shares higher more than 3% today.
Chevron also was the beneficiary of an analyst report, with JPMorgan upping its price target on CVX stock from $86 to $94 while maintaining an “overweight” rating. This came off a promising earnings report and a lowered estimate for capital expenditures in fiscal 2016.
JPMorgan’s target price also was boosted by Credit Suisse a day ago.
CVX stock rose back above its 200-day moving average today for the first time since September 2014.
Pioneer Natural Resources (PXD)
Pioneer shares rose more than 6% today after the natural gas and oil producer reported a third-quarter loss of a penny per share — far worse than the $1.35 per share earned in the year-ago quarter, but far better than the Zacks estimate for a 7-cent loss.
Revenue of of $883 million was way ahead of estimates for $767 million. Wall Street really seems to have gotten this one wrong, as the company’s production rose 7% to exceed the high end of its previous guidance by 1,000 barrels of oil per day.
PXD’s surge put it above its 200-day MA for the first time in seven months. PXD had fallen from $180 a share to a low around $105, but has since recaptured nearly half of that loss.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
