Alcoa tops S&P losers, Twitter extends losing streak

SAN FRANCISCO (MarketWatch) — Alcoa Inc. slumped on Friday in the wake of sizeable quarterly losses while Twitter Inc. retreated for a fifth day on valuation concerns.

Alcoa (AA)  shares slid 5.4% after the aluminum producer said late Thursday it swung to a fourth-quarter loss. On an adjusted basis, the company earned 4 cents a share, below expectations of 6 cents a share, according to FactSet estimates. The firm also said Thursday morning that it had settled charges of corruption in Bahrain with a $384 million payout to the Securities and Exchange Commission and Department of Justice. Shares slid 6.1%.

Shares of Twitter (TWTR)  edged down 0.1% for a weekly loss of 17%. The stock was downgraded to sell from hold with a price target of $32 at Cantor Fitzgerald earlier this week. "While historically we've reserved our 'SELL' rating to business models with structural challenges, we find TWTR's valuation to be excessive and currently see materially more downside than upside," analyst Youssef Squali said in a report.

John Blackledge at Cowen and Co. also initiated coverage of Twitter at underweight this week with a price target of $32.

Gainers Bloomberg Enlarge Image Abercrombie & Fitch Co. surged after raising its profit outlook. Gainers

Abercrombie & Fitch Co. (ANF)  rallied 12% after the firm raised its full-year adjusted per-share earnings forecast to a range of $1.55 to $1.65 from a previous estimate of $1.40 to $1.50. Analysts surveyed by FactSet expect $1.47 a share.

Top Value Stocks To Own Right Now

Ventas Inc. (VTR)  rose 4.6%. The stock was upgraded to buy from neutral with a price target of $63 at UBS.

Intuitive Surgical Inc. (ISRG)  rallied 8.6% following a positive write-up on its da Vinci surgery system from analysts at Wedbush. "Outcomes and cost-effectiveness data are beginning to favor da Vinci surgery as surgeons and operating room personnel gain greater experience with the technology," said analyst Tao Levy in his report. Levy believes adoption of robotic surgery will increase over time.

Shares of Intercept Pharmaceuticals Inc. (ICPT)  soared another 62% following a surge of 281% on Thursday. The company announced on Thursday that halted the trial of its obeticholic acid drug to treat nonalcoholic steatohepatitis (NASH) ahead of schedule on positive results. The drug could be the first reliable treatment option for patients facing liver transparent and as a result, obeticholic acid could be a true blockbuster, according to Jim Molloy, an analyst at Janney Capital Markets.

Decliners

Sears Holdings Corp. (SHLD)  disappointed the market with plunging same-store sales , sending its shares tumbling 14%. The company said comparable sales declined 7.4% in the quarter-to-date holiday season. The firm, which investors have punished for its reluctance to invest in its stores, said it forecasts a full-year loss of $7.64 to 8.61 a share, compared to the average estimate of $6.80 a share loss, according to FactSet.

Five Below Inc. (FIVE)  traded down 7.2% after it revised its guidance for the three months ended January 4. The retailer now expects adjusted per-share profit to be between 44 cents and 46 cents. In December, the firm said it expected adjusted profit of 49 cents to 51 cents.

Teradata Corp. (TDC)  shares slid 2.4%. Analysts at Mizuho earlier this week lowered the stock's price target to $48 from $52 due to continued pressure from large deals and weaker cost competitiveness.

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Trending tickers

MSFT: Microsoft Corp. (MSFT)  shares climbed 1.4%. The stock was upgraded to overweight from equalweight at Barclays. "We believe investor focus will soon shift from the outcome of the CEO search to the improving fundamentals of Microsoft's business," Raimo Lenschow, an analyst at Barclays, said in a report.

LEN: Home builders were strong with Lennar Corp. (LEN)  shares gaining 2% and D.R. Horton Inc. (DHI)  shares up 1.8%. Treasury yields fell on Friday after data from the Labor Department showed the economy generated fewer jobs than expected. The U.S. added 74,000 jobs last month, the smallest increase since the beginning of 2011. Economists surveyed by MarketWatch had forecast an increase of 193,000 nonfarm jobs. Lower interest rates are beneficial to the real-estate market, making loans more affordable.

PulteGroup Inc. (PHM)  shares added 1.9%, shaking off a downgrade at J.P. Morgan. "We are downgrading PHM to underweight from neutral based on the stock's expensive relative valuation, as well as our outlook for less meaningful gross margin expansion and below average order growth in 2014," said analyst Michael Rehaut in a note.

GPS: Gap Inc. (GPS)  rose 1.1% after saying it expects full-year per-share earnings near the top of its projected range of $2.57 to $2.65. The firm also said same-store sales in December were flat, missing expectations of a 1.5% increase, according to a survey of analysts by Thomson Reuters.

OMC: An announcement by European Union regulators cleared the way for advertising powerhouses Omnicom Group Inc. (OMC)  and rival Publicis Groupe SA (PUBGY) (PGPEF)   (FR:PUB) to merge. The combined firm is expected to be the world's largest advertising agency. Shares of Omnicom Group were up 1.4%.

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