February 10, 2014 – February 14, 2014
The beginning of the week started off as a collective holding of breath, waiting to see what comments Federal Reserve Chair Janet Yellen would make before Congress. On Tuesday, the wait was over with the markets rallying.
Yellen stated that even though employment reports have been weak, they haven’t been weak enough to halt or slow the reduction in the Fed’s bond purchase program. Citing the weather, she said it’s important to take time to evaluate further data as it becomes available before the next committee meeting in March. The extra time will allow the committee to gauge the true impact of the unseasonably cold temperatures plaguing large swaths of the country.
On Thursday, jobless claims for the week ending February 8 came in at 339,000, slightly higher than expected, and higher than the prior week by 8,000.
Also on Thursday, retail sales came in at a disappointing .4% decline. Analysts were expecting only a .1% decline. Automobile sales were the major culprit, and once again, bad weather was cited as the reason. At first, the market had a sharp drop on the news, but ended the day up modestly.
Now let’s take a look at some stocks.
Time Warner Cable (NYSE: TWC) and Comcast (NASDAQ: CMCSA) announced early Thursday that both companies’ Boards of Directors have both approved for Time Warner to merge operations with Comcast. Under the agreement, Comcast will acquire 100% of Time Warner’s outstanding shares, a transaction worth approximately $45.2 billion. Following the announcement, Time Warner shares traded to a new 52-week high of $146.18 while Comcast dipped nearly 4 points during Thursday trading.
Pepsico (NYSE: PEP) shares slipped nearly 4 points during Thursday’s trading even though the company reported a rise in profits. The pressure came from declining soda sale numbers in North America as well as Pepsico opting out of spinning off their billion dollar snack brands, Lays, Cheetos and Doritos. Pepsico believed that separating their beverage and snack business would prove to unbeneficial for the company as a whole.
Cisco Systems (NASAQ: CSCO) shares slipped more than 4 points Thursday after the company released their second quarter earnings report late Wednesday. Cisco was able to beat analysts’ forecasts, reporting a 2nd quarter 2014 revenue of $11.2 billion with earnings of $0.47 per share, however, the company reported a negative outlook for their third quarter.
Tesla Motors (NASDAQ: TSLA) made headlines on Thursday as the electric car stock traded above $200, at a 52-week high of $202.72 during mid-day. A lot of eyes are currently on Tesla as the company is scheduled to release their fourth quarter earnings report next Wednesday. Analysts have projected Tesla will report earnings of approximately $0.19 per share with $646 million in sales, a significant change compared to the year-ago loss of $0.65 per share.
Angie’s (NYSE: ANGI) List stock dropped as much as 20 points on Thursday after the company announced an extremely weak forecast for their first quarter earnings report. The company expects to report sales to be between $71.5 and $72.5 million; significantly lower analysts’ projections of $74.3 million.