Stock Markets Bounce on Opportunity Buying
NEW YORK (TheStreet) -- Major U.S. stock indices lifted higher Wednesday in the final hour of trading in a hurried scramble as investors bought equities rather than be left out of a surging market.
"People are looking for any opportunity, and on a day when it's flat, that's an opportunity" in this environment, said Randy Warren, chief investment officer at Warren Financial Service. Warren said traders have been looking for a May pullback to enter the market, but haven't yet gotten one.
Electronic Arts (EA), the biggest gainer on the S&P 500, surged 17.1% to $21.56 after predicting Tuesday that full-year earnings would come in above analysts' estimates after announcing a multi-year deal with The Walt Disney Co. (DIS), the world's largest entertainment company, to develop new "Star Wars" video games.EA's price target and estimates were increased at UBS Wednesday with analysts writing that the estimates were raised to reflect operating margin expansion, cost controls and free cash flow optimization, and that the price target moved up to $20. The next biggest advancer was Whole Foods Market (WFM), which popped 10.1% to $102.19 after the specialty supermarket surprised Wall Street by beating analysts' quarterly earnings estimates. It also announced a two-for-one stock split. "Earnings ... have bettered expectations ... but as we have pointed out in the past, this should not come as much of a surprise since expectations had been lowered so much," David Joy, Chief Market Strategist, at Minneapolis, MN-based Ameriprise Financial, wrote in a note. "And it seemingly overlooks the fact that top-line revenue growth has been disappointing - cutting one's way to prosperity works for only so long. Ultimately, it is the ongoing activism of central banks that seems to account for the refusal of stock markets to correct in any meaningful way, and on the contrary, to power their way to a series of new highs." Transportation and logistics company CH Robinson Worldwide ( CHRW) was the biggest decliner in the S&P, its shares losing 7% to $57.26 after receiving price-target cuts from various brokerages following its weaker-than-expected quarterly earnings report Tuesday. CH Robinson's price-target was slashed to $56 from $61 at Jefferies; to $68 from $78 at Deutsche Bank; and to $58 from $63 at RBC. CA Technologies ( CA) slumped 2.2% to $27.17 after the maker of software for managing information technology was downgraded at Oppenheimer to "perform" from "outperform" on a valuation call, with analysts saying that the company's restructuring moves will limit growth. The company reported Tuesday expectations that its 2014 revenue will decrease by 2% to 4% and that earnings per share will fall by 4% to 7%. The Mortgage Bankers Association released its seasonally adjusted index of mortgage application activity Wednesday morning. The index, which includes both refinancing and home purchase demand, rose 7% in the week ended May 4 after ticking up 1.8% in the week ended April 26. June gold futures soared $24.90 to $1,473.70 an ounce. Light sweet crude oil for June delivery settled up $1 at $96.62 a barrel. The benchmark 10-year Treasury was rising 2/32, diluting the yield to 1.775%. The dollar was off 0.41% to $81.94 according to the U.S. dollar index. Follow @atwtse Written by Andrea Tse and Joe Deaux in New York >To contact the writer of this article, click here: Andrea Tse.
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