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Mid-Afternoon Market Update: Ascena Retail Drops On Earnings Miss; DTS Shares Spike Higher

LEN, SAVA, TDW, NAII, HNI, SRPT

 


Toward the end of trading Tuesday, the Dow traded up 0.22 percent to 18,160.78 while the NASDAQ climbed 0.22 percent to 5,246.59. The S&P also rose, gaining 0.20 percent to 2,143.33.

Leading and Lagging Sectors

Tuesday afternoon, healthcare shares gained 0.71 percent. Meanwhile, top gainers in the sector included Sarepta Therapeutics Inc (NASDAQ: SRPT), and Pain Therapeutics, Inc. (NASDAQ: PTIE).

In trading on Tuesday, energy shares fell by 0.26 percent. Meanwhile, top losers in the sector included Tidewater Inc. (NYSE: TDW), down 9 percent, and Pioneer Energy Services Corp (NYSE: PES), down 8 percent.

Top Headline

Lennar Corporation (NYSE: LEN) reported 5.6 percent year-over-year earnings growth for the third quarter driven by 14 percent uptick in top line that came in above the Street analysts' estimates.

The company reported net earnings of $235.8 million, up 5.6 percent from $223.3 million while EPS advanced 5.2 percent from $0.96 to $1.01. Street analysts' expected the company to deliver an EPS of $0.90.

Lennar revenue increased 14 percent from $2.49 billion to $2.83 billion thus beating the Street estimates of $2.68 billion. While deliveries advanced 7 percent, new orders volume grew 8 percent and backlog volume increased 12 percent.


Equities Trading UP

Tobira Therapeutics Inc (NASDAQ: TBRA) shares shot up 706 percent to $38.21 after the company agreed to sell itself to Allergan plc (NYSE: AGN). As part a merger agreement between the two companies, Allergan will acquire Tobira for an upfront payment of $28.35 per share in cash and up to $49.84 per share in Contingent Value Rights (CVRs) which may be payable based on the completion of certain development, regulatory and commercial milestones. Total consideration for the acquisition could be up to $1.695 billion.

Shares of DTS Inc. (NASDAQ: DTSI) got a boost, shooting up 23 percent to $42.21. Tessera Technologies, Inc. (NASDAQ: TSRA) and DTS, Inc. reached a definitive agreement through which the former would buy the latter for $42.50 a share in cash. William Blair downgraded from Outperform to Market Perform.

Natural Alternatives International, Inc. (NASDAQ: NAII) shares were also up, gaining 19 percent to $12.10. Natural Alternatives reported Q4 earnings of $0.52 per share on sales of $35.7 million.


Equities Trading DOWN

Ascena Retail Group Inc (NASDAQ: ASNA) shares dropped 29 percent to $5.78 after the company reported downbeat earnings for its fourth quarter and issued a weak forecast for the first quarter. RBC Capital downgraded Ascena Retail from Outperform to Sector Perform, while Oppenheimer downgraded the stock from Outperform to Perform.

Shares of HNI Corp (NYSE: HNI) were down 22 percent to $42.24 after the company lowered its Q3 and FY earnings outlook.

MGT Capital Investments Inc. (NYSE: MGT) was down, falling around 25 percent to $1.89 after the company issued an update on status of D-Vassive acquisition. The company has been told that it cannot list 43.8 million shares on the NYSE to close D-Vassive merger. MGT Capital still remains committed to close the deal.


Commodities


In commodity news, oil traded down 0.41 percent to $43.68 while gold traded down 0.03 percent to $1,317.40.

Silver traded down 0.10 percent Tuesday to $19.27, while copper rose 0.30 percent to $2.16.

Eurozone

European shares closed mostly lower today. The eurozone’s STOXX 600 slipped 0.08 percent, the Spanish Ibex Index fell 0.34 percent, while Italy’s FTSE MIB Index declined 1.17 percent. Meanwhile the German DAX gained 0.19 percent, and the French CAC 40 declined 0.13 percent while U.K. shares rose 0.25 percent.

Economics

The Federal Open Market Committee will begin its two-day policy meeting today.

Housing starts declined 5.8 percent in August to an annual pace of 1.14 million. Economists were expecting a 1.19 million pace for the month.

The Johnson Redbook Retail Sales Index declined 0.5 percent during the first three weeks of September versus August.



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