Wall St ends slightly higher, Dow drags

REUTERS - U.S. stocks were mixed on Wednesday, but strong earnings were enough to keep the S&P 500 and Nasdaq in positive territory.

The Dow Jones industrial average <.DJI> is falling 26.91 points, or 0.16 percent, to 17,086.63, the S&P 500 <.SPX> is up 3.48 points, or 0.18 percent, to 1,987.01 and the Nasdaq Composite <.IXIC> is adding 17.68 points, or 0.4 percent, to 4,473.70.

The Dow was dragged lower by losses in Boeing Inc , which fell 2.3 percent following earnings. The stock accounted for 19 points of negative drag on the 30-stock average.

The largest percentage gainer on the New York Stock Exchange was Puma Biotechnology , which is up 295 percent, while the largest percentage decliner is Unisys Corp , down 20.9 percent.

 

Advancing issues outnumbered Declining ones on the NYSE by 1,753 to 1,267, for a 1.38-to-1 ratio on the upside; on the Nasdaq, 1,339 issues are falling and 1,316 advancing for a 1.02-to-1 ratio favoring decliners.

The broad S&P 500 index posted 56 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 63 new highs and 29 new lows.

From earlier in the day:

16:05 - Although it exceeded analyst estimates with first-quarter earnings, Electronic Arts shares plunged 6.2 percent to $36.05 on Tuesday afternoon.

More than 12 million Electronic Arts shares traded hands on Tuesday, a leap from the company's 10-day moving average volume of 3.6 million shares. The company was among the top 25 most heavily traded stocks in the Nasdaq.

Despite market movement, several brokerages have increased their target prices for Electronic Arts, citing the company's better-than-expected sales, control over expenses and decision to delay releasing certain games.

BMO raised its target price for Electronic Arts to $46 from $40, Stifel raised its to $46 from $42 and Cowen and Company raised its to $44 from $38 on Tuesday.

StarMine data projects the shares should be valued at $31.78.

14:29 - As the market pushes further into record territory, with the S&P 500 hitting another intraday all-time high Wednesday, at least one analyst says investors need not worry about U.S. stocks reaching a peak anytime soon.

Richard Bernstein, CEO of Richard Bernstein Advisors in New York, sees the five-year bull market remaining intact, largely because sentiment isn't toppy and valuations are fair.

"On the investors' side, we find no complacency whatsoever. Everyone's still pretty scared ... Almost no one's looking at the upside. They are more interested in protecting against the downside," Bernstein, whose firm has $3.3 billion in assets under management, told reporters on Wednesday.

"The market is roughly fair value .... The notion that it's monstrously overvalued, I don't think that's right," he said.

The S&P 500 is now up 7.4 percent for the year, while its forward price-to-earnings ratio stands at 15.4 versus an average forward P/E since 1968 of 14.8, according to Thomson Reuters data.

Index snapshot at 14:28:

* S&P 500 <.SPX> is up 4.33 points, 0.22 percent.

* Nasdaq Comp <.IXIC> is adding 18.34 points, 0.41 percent.

* Dow industrials <.DJI> are down 17.82 points, 0.1 percent.

* Russell 2000 <.TOY> is adding 1.44 points, 0.12 percent.

* S&P MidCap <.IDX> is down 2.67 points, 0.19 percent.

* S&P SmallCap <.SPCY> is off 1.09 points, 0.16 percent.

13:48 - Xilinx shares are getting hammered, down 14.5 percent to $41.19, after the chipmaker posted first-quarter earnings that topped expectations but missed on revenue, and forecast revenue that would fall short of analysts' expectations. [ID:nL4N0PX5GU]

The drop would mark the biggest percentage decline for the stock since October 2005. Volume of 26 million shares is nearly more than 10 times its 10-day average and the most since February 2007.

The weakness in Xilinx weighed on the PHLX semiconductor index <.SOX>, which is down 2 percent. After a 15-day rally helped spur the index to a near 13-year high on July 16, the index has pulled back 2.3 percent including Wednesday's drop.

But Xilinx may be poised to rebound, as StarMine holds an intrinsic value of $46.60 on the stock, 13 percent above its current price. StarMine also holds a 98 percent rating on the company's earnings quality, helped by a 96 out of 100 ranking in its cash flow component.

Index snapshot at 13:14:

* S&P 500 <.SPX> is up 2.01 points, 0.1 percent.

* Nasdaq Comp <.IXIC> is adding 12.40 points, 0.28 percent.

* Dow industrials <.DJI> are down 35.19 points, 0.21 percent.

* Russell 2000 <.TOY> is adding 0.75 points, 0.06 percent.

* S&P MidCap <.IDX> is down 3.1 points, 0.22 percent.

* S&P SmallCap <.SPCY> is off 1.31 points, 0.2 percent.

12:46 - The U.S. Securities and Exchange Commission is moving to widen tick sizes in the illiquid small cap market, but whether or not those efforts are necessary remains up for debate, Credit Suisse said in a memo Tuesday.

Small caps have a posted size - the number of shares listed for sale - that is about four times smaller than large caps. The SEC hopes that by increasing the tick size, or the spread between the bid and ask price, for small cap stocks, it will stir up investor interest in the market and make it easier for emerging companies to grow and file IPOs.

While the SEC's plan to impose a mandated minimum tick size will likely succeed in widening spreads, increasing trade sizes and injecting liquidity into the small caps market, Credit Suisse analyst Ana Avramovic said "increasing ticks and forcing trading to stay on exchanges may actually be hurting price discovery."

"Do small caps actually 'suffer' from not having enough posted size? Furthermore, is imposing a barrier to natural market forces a good thing?" Avramovic wrote in the report.

Rolling out the tick pilot program may increase wait times and the cost of trading for investors, the report says.

Legislators see a different picture. Despite an SEC panel advising against launching a pilot program to widen tick sizes, proponents of the program argue that increasing them from their present penny to five cents or more could make it easier for emerging businesses to take their companies public and generate jobs.

Under the SEC's June 24 directive, exchanges and FINRA must file plans for a tick pilot program that will be open to public comment. Should the SEC vote to approve the plan, it will be effective for one year.

12:30 - The surge in Puma Biotechnology on Wednesday, up nearly 300 percent to $228.30 after a successful late-stage trial of its experimental breast cancer drug caught many market participants off guard. [ID:nL4N0PX5VS]

Based on options positioning, very few expected a jump in Puma's share price, according to Andrew Wilkinson, chief market analyst at Interactive Brokers Group in Greenwich, Connecticut.

Of the four available expiration dates through March 2015, the highest strike price with any open interest coming into Wednesday was for the September expiration at a strike price of $180, where only seven contracts were owned, according to Wilkinson.

The most active contracts today, the August $65 strike calls, now trade for $156 more than what they closed at on Tuesday, to stand at $162 per contract.

Index snapshot at 12:21:

* S&P 500 <.SPX> is up 4.43 points, 0.22 percent.

* Nasdaq Comp <.IXIC> is adding 20.38 points, 0.46 percent.

* Dow industrials <.DJI> are down 24.53 points, 0.14 percent.

* Russell 2000 <.TOY> is adding 4.57 points, 0.4 percent.

* S&P MidCap <.IDX> remained unchanged.

* S&P SmallCap <.SPCY> is up 0.84 points, 0.13 percent.

11:22 - Shares of Herbalife Ltd are down on Wednesday, slipping a bit after soaring on Tuesday even as activist investor Bill Ackman attempted, without much success, to convince investors that the multi-level marketing company is a criminal enterprise.

The stock jumped 25 percent on Tuesday, leaving many who used put options to bet on big losses by the end of the week with substantial losses.

About 177,000 contracts traded were put options, which soared in value as investors took bets on big declines in shares, only to see their value plunge when the stock rallied sharply.

For example, there was a surge in action in put options expiring at the end of the week with a $45 strike price - a bet the stock would close at less than that amount by Friday. The premium, or cost, of those contracts hit $1.27 shortly before Ackman's presentation, only to fall to 3 cents by the end of the day.

About 2,700 contracts were bought around $1.14 each late Monday - which would come to a cost of about $308,000. If the buyer held those contracts through Tuesday's close, they would have seen their value drop to about $8,100.

Interest in betting against the stock has continued. Sungard's Astec Analytics data shows the cost to borrow shares for short bets rose five-fold yesterday.

More than 277,000 options contracts in Herbalife traded on Tuesday, its second-busiest day in history, trailing just Feb. 15, 2013, when billionaire Carl Icahn's stake was revealed, according to Henry Schwartz of Trade Alert.

Index snapshot at 11:17:

* S&P 500 <.SPX> is up 5.35 points, 0.27 percent.

* Nasdaq Comp <.IXIC> is adding 22.96 points, 0.52 percent.

* Dow industrials <.DJI> are down 9.87 points, 0.06 percent.

* Russell 2000 <.TOY> is adding 5.02 points, 0.44 percent.

* S&P MidCap <.IDX> is up 0.18 points, 0.01 percent.

* S&P SmallCap <.SPCY> is up 0.95 points, 0.04 percent.

11:02 - Technology hardware and biotechnology shares are leading the stock market Tuesday, boosted by earnings from heavyweights Apple and Biogen Idec Inc in the last 24 hours.

Apple's shares rose 3.2 percent to $97.72 coming off a positive but worse-than-expected earnings report from Monday. The stock added 2 points to the S&P index, which hovered around the positive 0.28 percent mark mid-morning.

Biogen shares are up 10.9 percent to $336.62, placing it behind Intuitive Surgical as the S&P's second biggest percentage gainer. The Cambridge, Massachusetts-based biotechnology company's earnings of $3.49 per share far exceeded analysts' estimates of $2.83 per share, leading the company to raise its full-year earnings outlook on Tuesday.

Stock indexes remained near the zero mark as investors continued keeping their eyes on earnings reports, as well as instability in Ukraine and Gaza.

Index snapshot at 11:01:

* S&P 500 <.SPX> is up 4.39 points, 0.22 percent.

* Nasdaq Comp <.IXIC> is adding 19.71 points, 0.44 percent.

* Dow industrials <.DJI> are down 9.03 points, 0.05 percent.

* Russell 2000 <.TOY> is adding 4.5 points, 0.39 percent.

* S&P MidCap <.IDX> is down 0.78 points, 0.06 percent.

* S&P SmallCap <.SPCY> is up 0.74 points, 0.11 percent.

10:23 - U.S. stock indexes are near unchanged mark in early trading on Wednesday as investors dealt with the latest flurry of earnings reports, while the latest developments in Ukraine and Gaza spurred caution.

The S&P 500 managed to touch a fresh record intraday high for a second straight day, climbing to 1,987.46, but has been unable to significantly break through the 1,985 area that is now acting as a resistance level.

"When we do focus on earnings there's more good news than bad for sure," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

"What we have today is a testing of the (resistance level) on the S&P. With the addition of the fighter jets being downed in Ukraine, people are looking at the market and can't seem to find a way to break through."

The Dow Jones industrial average <.DJI> is falling 25.82 points, or 0.15 percent, to 17,087.72, the S&P 500 <.SPX> is up 2.41 points, or 0.12 percent, to 1,985.94 and the Nasdaq Composite <.IXIC> is adding 14.21 points, or 0.32 percent, to 4,470.22.

The largest percentage gainer on the New York Stock Exchange is Puma Biotechnology , which is up 275.22 percent, while the largest percentage decliner is Unisys Corp , down 16.01 percent.

At the NYSE, the most active stocks are Citigroup , up 1.07 percent to $50.13; Bank Of America , up 0.64 percent to $15.62 and Juniper Networks , down 10.56 percent to $22.20.

On the Nasdaq, the top 3 most active stocks are Apple Inc , up 2.3 percent to $96.86; Microsoft , up 0.6 percent to $45.10 and Facebook Inc , up 1.6 percent to $70.40.

Advancing issues are outnumbering declining ones on the NYSE by 1,484 to 1,257, for a 1.18-to-1 ratio on the upside; on the Nasdaq, 1,290 issues are rising and 1,116 falling for a 1.16-to-1 ratio favoring advancers.

The broad S&P 500 index is posting 35 new 52-week highs and 2 new lows; the Nasdaq Composite is recording 38 new highs and 16 new lows.

09:22 - Futures are pointing to a slightly higher open on Wall Street, with earnings from large cap companies such as Microsoft , Boeing and PepsiCo providing support.

S&P 500 companies' profits are expected to grow 5.1 percent in the second quarter, according to Thomson Reuters data, down from the 8.4 percent growth forecast at the start of April. Revenue is seen up 3.4 percent.

Thomson Reuters data also shows that of 115 companies in the S&P 500 that reported earnings through Tuesday morning, 66.1 percent beat Wall Street expectations, a touch below the 67 percent rate for the past four quarters and above the 63 percent rate since 1994.

With the S&P 500 <.SPX> holding just below record its record high, concerns over the geopolitical climate could serve to keep gains in check as clashes in Gaza continued and Ukraine said pro-Russian rebels shot down two Ukrainian fighter jets.

Futures snapshot at 9:17:

* S&P 500 e-minis are up 3.75 points, 0.19 percent, with 126,375 contracts changing hands.

* Nasdaq 100 e-minis are gaining 14.25 points, 0.36 percent in volume of 25,839 contracts.

* Dow e-minis <1YMc1> are up 15 points, 0.09 percent with 23,863 contracts changing hands.

08:49 - Puma Biotechnology shares are surging in premarket trade, nearly quadrupling its closing price of $59.03 to trade at $215 after the company said its experimental breast cancer drug met its main goal in a late-stage trial.

Consolidated premarket volume of over 550,000 shares makes it the third-most actively traded issue listed on the New York Stock Exchange and has already surpassed its 10-day average of 482,749 shares.

Should the gains hold throughout the session, the move would easily be the biggest one-day percentage gain in the stock's history, dwarfing a 68 percent jump in December 2013 after positive phase II trial data for the same drug.

Futures snapshot at 8:38:

* S&P 500 e-minis are up 3 points, 0.15 percent, with 109,861 contracts changing hands.

* Nasdaq 100 e-minis are gaining 11.5 points, 0.29 percent in volume of 23,180 contracts.

* Dow e-minis <1YMc1> are up 15 points, 0.09 percent with 21,655 contracts changing hands.

08:08 - Futures are little changed on Wednesday, as a dearth of economic data puts investor focus squarely on the next wave of corporate earnings reports.

Tech giants Apple , up 0.7 percent to $95.42, and Microsoft , up 2.3 percent to $45.85, are gaining ground in premarket a day after posting quarterly results.

Dow component Boeing is also advancing before the opening bell, up 1.7 percent to $131.90 after the aerospace company reported second-quarter earnings that topped expectations and raised its full-year forecast. [ID:nL4N0PY3EG]

Nearly 40 companies in the S&P 500 are scheduled to report earnings on Wednesday, with Facebook , Qualcomm and AT&T scheduled to report after the close.

Futures snapshot at 8:02:

* S&P 500 e-minis are up 2.75 points, 0.14 percent, with 100,016 contracts changing hands.

* Nasdaq 100 e-minis are gaining 12.5 points, 0.32 percent in volume of 21,075 contracts.

* Dow e-minis <1YMc1> are up 14 points, 0.08 percent with 20,460 contracts changing hands.

(Reporting by Chuck Mikolajczak; additional reporting by Michael Connor and Caroline Valetkevitch)