Market News: Alcoa Inc (AA), ADT Corp (ADT), Caterpillar Inc. (CAT)

The NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) reached an all-time high at 4,000 points for the first time since September 2000, but it was not able to hold on to that level by the end of the trading session on Monday. The Nasdaq ended the day at 3,994.14 points, up by 0.6% or 2.49 points.

The Dow Jones Industrial Average (INDEXDJX:.DJI) slightly gained to 16,072.54 points while the S&P 500 (INDEXSP:.INX) declined to 1,802.48 points.

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In a telephone interview with Bloomberg, Cam Albright, director of asset allocation at Wilmington Trust commented, “The market is not necessarily overextended, but probably moderately rich. It’s probably difficult to envision this market getting a lot more upside unless it has this continued success on earnings and economic growth. The deal with Iran takes some of the risk premium out of the marketplace for the moment at least.”

On the other hand, Warren Koontz, co-manager of Loomis Sayles Value opined that the most positive statement came from the Federal Reserve. According to him, “The most bullish thing you could have is the Fed says, ‘Hey, we feel comfortable enough to step away.’ The underpinning of the stock market is probably pretty good.”

The Federal Open Market Committee (FOMC) indicated in the minutes of its October meeting that the central bank might start tapering its $85 billion monthly bond-buying program over the next several months. Economists polled by Bloomberg projected that the Federal Reserve will start reducing the stimulus in March next year.

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 16, 072.54 (+0.05%)
  • S&P 500- 1,802.48 (-0.13%)
  • NASDAQ- 3,994.57 (+0.07%)
  • Russell 2000- 1,124.40 (-0.05%)

European Markets

  • EURO STOXX 50 Price EUR- 3,072.75 (+0.55%)
  • FTSE 100 Index- 6,694.62 (+0.30%)
  • Deutsche Borse AG German Stock Index DAX- 9,299.95 (+0.88%)

Asia Pacific Markets

  • Nikkei 225- 15, 619.13 (+1.54%)
  • Hong Kong Hang Seng Index- 23,684.65 (-0.05%)
  • Shanghai Shenzhen CSI 300 Index- 2, 388.63 (-0.39%)

Stocks in Focus

The stock price of Alcoa Inc (NYSE:AA) gained almost 3.79% to $9.59 per share after analysts at Goldman Sachs Group Inc (NYSE:GS) upgraded with rating for the shares of the aluminum giant from Neutral to Buy. Analysts Sal Tharani and Chelsea Bolton believed that the stock will rise to $11 a share. According to them, “We believe that the market is not fully appreciating Alcoa Inc (NYSE:AA)’s solid position in growing value-added and high-margin aluminum products for the aerospace and automotive industries.”

The shares of ADT Corp (NYSE:ADT) dropped 5.79% to $41.46 per share after the home security company disclosed its agreement to repurchase 10.2 million shares from Corvex Management LP for $44.01 per share. Corvex founder Keith Meister will vacate its position from the board of ADT. The activist hedge fund still owns a significant number of shares of the home security company.

Caterpillar Inc. (NYSE:CAT) rose 2% to $84.40 per share after an analyst at Bank of America Corp (NYSE:BAC) raised its Neutral rating for the stock to Buy with a price target of $100 per share. Analysts Ross Gilardi and Michael Feniger said, “While the mining and construction equipment outlooks remain murky, the Power Systems business should put a floor under earnings, in our view.” They estimated that Caterpillar Inc. (NYSE:CAT)’s power systems business will contribute 50% of its operating earnings next year.

Meanwhile, the stock value of DaVita HealthCare Partners Inc (NYSE:DVA) increased 8.86% to $61.55 per share after the Center for Medicare and Medicaid Services rejected the proposed 9.4% cut in Medicare payments to dialysis providers.