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02/12/16 11:00:01 AM
WORD ON THE STREET

The Boeing Company, FireEye, Inc., Twitter, Inc.

The Boeing Company(BA) : A rebound in oil overnight and stronger-than-expected retail sales helped stocks track a moderately higher open, but the question is whether the market can continue to build on Thursday's late rally. Retail sales, which came in up 0.2% in January compared to industry analysts' estimate of 0.1%, might help. Investors will wade through more data later Friday, notably consumer sentiment and business inventories. Even as investors examined retail sales data for any kind of improvement in consumer sentiment, they also had their minds on Thursday's dramatic U.S. session, which at one point saw the S&P 500 (SPX) break under its Jan. 20 low of 1,812.29, hitting 1,810.01. Late Thursday, stocks roared back, making up nearly half the ground they had lost at session lows after the Wall Street Journal reported that OPEC might agree to cooperate with other countries to cut oil production. The rally allowed the S&P 500 to close above key support at 1,820, giving the market something to build on from a technical perspective Friday. The question is whether it can continue to hold that level. Continued strength in the oil market helped lift European stocks early Friday, as did a relief rally in shares of battered European banks. Stronger European performance gave U.S. stocks a boost. Investors continue to pile into bonds and gold (which set a new intraday one-year high above $1,260 an ounce Thursday) as they seek safety amid the continued stock market rout,. However, bond yields climbed from Thursday's lows, with the 10-year yield recently at 1.68%. Investors are looking to see if it can break the key 1.7% level today, and debate continues about whether U.S. rates are too high compared with rates around the world. The U.S. banking sector, on the other hand, took a dive on Thursday, and investors will watch closely to see how banking stocks perform Friday. Some of the big financial names whose stocks swooned included JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo & Company (NYSE: WFC), Citigroup, Inc. (NYSE: C) and Bank of America Corporation (NYSE: BAC). Lower interest rates put pressure on the banks' net interest margins. Jet Maker's Stock Plunges: Shares of The Boeing Company (NYSE: BA) fell $7.92, or 6.8%, to a more than two-year low of $108.44 on Thursday. The Dow component--a closely watched manufacturer--tumbled after Bloomberg News reported that the maker of jet aircraft is having its accounting investigated by the U.S. Securities and Exchange Commission. Boeing and the SEC declined to comment to Bloomberg on the report. Volatility Surges To Six-Month High: The CBOE Volatility Index (VIX) advanced double digits in percentage terms midway through Thursday's session before giving up some ground. The closely watched measure of market volatility still finished the day up 7% at 28.14, the highest level since last August. Ships in the Night: On Monday, the mainland Chinese stock market will open after a week off for the New Year. However, the U.S. stock market will be closed Monday for the President's Day holiday, re-opening Tuesday, when the two markets will trade again on the same day for the first time since Feb. 5. Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga PRO: http://pro.benzinga.com 2015 Benzinga Newswires. Benzinga does not provide investment advice. All rights reserved.



FireEye, Inc.(FEYE) : FireEye Inc (NASDAQ: FEYE) shares have plummeted 70.51 percent over the past six months, trading almost at their 52 week low on February 8, at $11.96 Barclays' Saket Kalia has maintained an Equal-weight rating on the company, while lowering the price target from $21 to $18. The company announced its quarterly results mostly in line with the pre-announcement, while the FY16 guidance was in line with the previous estimates. Analyst Saket Kalia believes that with the quarterly results mostly in line with the January 20 pre-announcement, investors were likely to focus on the FY16 guidance. While the FY16 guidance was more or less in line with the previous estimates, the contribution from acquisitions was higher than expected. "FY16 billings guidance of $975-$1,055M compares to our previous $999M, which both assume 20 percent organic growth," Kalia said. The recent acquisitions of iSight and Invotas are expected to contribute billings worth $60-$65 million, although excluding the large deals in 1H15, apples-to-apples billings growth would be about 25 percent. Kalia noted that "management plans on keeping operating expenses roughly flat from 1Q to 4Q, as they leverage investments and direct spending to higher growth areas like FaaS, which grew 100 percent in FY15," while adding that new products in FY16 "will segment the market to better compete."



Twitter, Inc.(TWTR) : Shares of Twitter Inc (NYSE: TWTR) have declined 36 percent since January 4 this year. Argus' Jim Kelleher reiterated a Buy rating on the company, while reducing the price target from $45 to $24. Relative underperformance in Twitter shares has created an attractive entry point, but the company needs to take steps to boost its growth, Kelleher stated. Twitter reported in-line 4Q15 top line results but with no sequential growth in its monthly active users or MAUs. The company's advertising revenue growth remained strong despite an unanticipated currency headwind. The company's CEO, Jack Dorsey, intends to take steps to make services easier to use and more appealing to "creators and influencers." Twitter aims to bolster its live streaming video services, strengthen its platforms besides improving relationships with developers. "While these are all worthy goals, they will be incidental if the company cannot rekindle growth in MAUs," analyst Jim Kelleher mentioned. The analyst pointed out that Twitter needs to boost the number of its users in the U.S., where ad revenue per user is significantly higher than worldwide ad revenue per user, in order to restore growth. "The return of Jack Dorsey and his clearly focused five-part agenda could help operating efficiency and create a better platform; whether it can rekindle user growth is yet to be seen. We expect the company to strengthen its franchise, but process will likely take longer than earlier envisioned," the Argus report stated. Kelleher pointed out that investment in Twitter is appropriate for risk-tolerant investors with a long-term time frame.



 

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