Stocks Open Lower: Big Banks Rise, Netflix Price Target Hiked

DATE POSTED:October 12, 2017

Stocks were off to a soft start Thursday, as earnings news from JPMorgan (JPM), Citigroup (C) and others set the third-quarter reporting season in motion.

XAutoplay: On | OffThe Dow Jones industrial average, the Nasdaq Composite and the S&P 500 all downshifted 0.1% at the starting bell.

JPMorgan, Citibank, Netflix Climb, Domino Dives

On the Dow, Walt Disney (DIS) dropped 1.4% as Guggenheim pared its rating on the stock to neutral, from buy.

JPMorgan inched up 0.1% after reporting third-quarter sales and earnings comfortably above analysts' targets. But a 2% drop in investment banking revenue and a 16% dive in markets and investor services revenue raised concerns.

JPMorgan shares remained in a buy range, above a flat base buy point at 95.32.

Citigroup stepped up 0.9% as its third-quarter results exceeded expectations. The stock is extended above a 69.96 buy point in a flat base.

Apple (AAPL) edged up 0.2% and all of the FANG stocks opened higher. Netflix (NFLX) topped the group with a 1.5% gain. Bernstein reiterated its outperform rating on the stock, and raised its price target to 230, from 203.

Amazon.com (AMZN) ticked 0.4% higher. The e-commerce juggernaut announced plans to add 120,000 employees for the holiday season. The release said thousands of temporary workers were converted to full-time employment after last year's holiday season, and it expects similar results at the start of 2018.

Amazon shares ended Wednesday back above support at their 10-week moving average, up 7% from a late September low and working to build the right side of a possible three-month base pattern.

Among IBD 50 stocks, Universal Display (OLED) led with a 1% gain.

Ulta Beauty (ULTA) dropped 5%, to the bottom of the Nasdaq 100 list. Network security provider Juniper Networks (JNPR) tumbled 4%, after Instinet cut the stock's rating to neutral, from buy.

Domino's Pizza (DPZ) fell 4% despite beating targets for third-quarter sales and earnings growth, and announcing a $1.25 bil share buyback initiative. Domino shares have advanced for six straight weeks off a late-August low, building the right side of a four-month cup base.

Blackhawk Network (HAWK) dived 18% at the open. The credit card payment processor reported mixed third-quarter results late Wednesday, and offered fourth-quarter revenue guidance below consensus views. The move sent shares sharply below the stock's 10-week moving average in heavy trade, triggering a sell signal.

Producer Prices, Jobless Claims Drop; Nikkei Aces New High

Prices paid by producers rose 0.4% in September, the Labor Department reported, doubling August's 0.2% gain and in line with consensus views. Food and energy had little impact on the increase, with core prices minus those factors rising 0.4%, and surprising economist estimates for a 0.2% gain.

Unemployment claims dropped sharply, down 7% to 243,000 for the week ended Oct. 7. That was far below forecasts for a dip of roughly 3% to 252,000 applications. The prior week's estimate was revised downward to 258,000, from 260,000. The four-week moving average also saw a steep drop, to 257,500, from 268,250.

The Energy Information Administration delivers weekly natural gas inventories at 10:30 and oil inventories at 11 a.m., and the Treasury Department's September budget is due out at 2 p.m. All times are ET.

Federal Reserve Board governors Lael Branard and Jerome Powell speak at separate conferences in Washington, D.C., at 10:30 a.m. ET.

In Japan, Tokyo's Nikkei 225 rose 0.4% in a landmark session that lifted the index above its prior high, set in June 2015, to close at its highest mark since July 1996. China markets booked another mixed session with Hong Kong's Hang Seng index up 0.2%, ending less than 1% from its April 2015 high.

Europe's markets were midway through another mixed session with London's FTSE 100 up 0.2% and Paris' CAC-40 down 0.2%.


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