TheChek News Flow

After Hours Summary: KGJI +10.7%, HOLI +5.8%, NTAP +0.6%, NDLS -20.6%, CNAT -13.6%, XONE -9.1%, CSCO -1.3% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: KGJI +10.7%, HOLI +5.8%, AZPN +3%, IAG +2.6%, GEVO +2.1%, RMAX +1.4%, FRSH +1.2%, NTAP +0.6%

Companies trading higher in after hours in reaction to news: GSL +2.3% (announced pricing of depositary shares representing $35 mln of preferred stock at $25 per share), IQNT +1.9% (increased quarterly dividend 100% to $0.15 from $0.075 per share), PRSC +1.7% (to replace UNS Energy in the S&P SmallCap 600), PCP +1.0% (Board approved a $1 bln expansion to co's existing share repurchase program), PFE +0.8% (co confirmed that the Advisory Committee on Immunization Practices votes to recommend Prevnar 13 vaccine in adults aged 65 years and older), ORLY +0.1% (Board announced an additional $500 mln share repurchase authorization)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: NDLS -20.6%, CNAT -13.6%, VCYT -11.6%, TKMR -10.5%, YUME -9.1%, XONE -9.1%, VJET -7.2%, OCLR -5.8%, VIPS -4.4%, EXXI -4.2%, EMAN -4.1%, CIDM -3.9%, USU -2.2%, SLW -1.9%, INVE -1.9%, CSCO -1.3%, LPCN -0.2%

Companies trading lower in after hours in reaction to news: CNAT -13.6% (co said it is deferring the announcement of top-line results from the Phase 2 NAFLD/NASH clinical trial to Q1 2015; co also reported earnings), TKMR -10.5% (co remains on clinical hold as it relates to the multiple-ascending dose portion of the Phase I clinical study in healthy volunteers with TKM-Ebola, expects matter to be resolved by Q4 2014; co also reported earnings), ENPH -5.7% (announced proposed public offering of common stock by selling stockholders), FSFR -3.9% (announced public offering of 22.8 mln shares of common stock), PDII -3.5% (co's subsidiary Interpace Diagnostics entered the molecular diagnostics market with thyroid and pancreatic cancer test portfolio acquisition of miRInform for $8 mln in upfront cash, future commercial milestone-based payments, and royalties), AMGN -2.2% (announced that the Phase 3 clinical trial FOCUS evaluating Kyprolis in patients with relapsed and advanced refractory multiple myeloma did not meet its primary endpoint), TKR -1.9% (announced proposed offering of $300 mln in senior notes due 2024), AMH -1.7% (announced public offering of 13 mln shares of Class A common shares)

Closing Market Summary: Stocks and Bonds End Near Highs

The stock market ended the midweek session on an upbeat note with the Nasdaq Composite in the lead. The tech-heavy index advanced 1.0%, while the S&P 500 added 0.7% with all ten sectors ending in the green.

Equity indices registered roughly half of their gains at the open with heavily-weighted health care (+1.2%) and technology (+1.1%) providing support from the start. In fact, only one other sector—industrials (+0.8%)—ended ahead of the broader market.

Notably, the health care space was underpinned by biotechnology. The iShares Nasdaq Biotechnology (IBB 257.13, +5.47) surged off its 50-day moving average for a 2.2% gain, registering its best close since late July. In addition to supporting the top-weighted countercyclical sector, biotech helped fuel the Nasdaq rally.

Top-weighted tech components like Apple (AAPL 97.24, +1.27), Facebook (FB 73.77, +0.94), and Google (GOOGL 584.56, +12.44) also provided support to the Nasdaq, while chipmakers followed closely. The PHLX Semiconductor Index added 0.9% to extend its weekly gain to 1.8%. Of the 30 index components, 26 settled higher, while Cree (CREE 44.82, -4.39) tumbled 8.9% following its one-cent beat and below-consensus guidance for the upcoming quarter.

Elsewhere, industrials drew strength from defense contractors, while transport stocks ended in line with the broader market. The PHLX Defense Index rose 1.4% with Raytheon (RTN 93.64, +2.26) leading the way. For its part, the Dow Jones Transportation Average settled higher by 0.7%.

Although every sector finished higher, there were some soft spots present in the market. Retail stocks underperformed throughout the session following a disappointing Retail Sales report for July and worse than expected earnings from Macy's (M 56.47, -3.29). The stock fell 5.5%, while the SPDR S&P Retail ETF (XRT 84.52, -0.54) lost 0.6%.

On the countercyclical side, consumer staples (+0.3%), utilities (+0.2%), and telecom services (+0.1%) all finished near their flat lines, while the aforementioned health care sector provided leadership.

Strikingly, the daylong strength in equities did not lure money out of the Treasury market. The 10-yr note climbed throughout the session, ending near its high. The benchmark yield slipped three basis points to 2.42%.

Participation was below average with fewer than 550 million shares changing hands at the NYSE.

Economic data included Retail Sales, Business Inventories, and the MBA Mortgage Index:

* Retail sales showed no growth in July following an unrevised 0.2% increase in June, while the Briefing.com consensus expected an increase of 0.3% 

* Motor vehicle sales weighed down overall consumer demand 

* Manufacturers already reported a drop in unit sales for July (16.5 million SAAR from 16.9 million SAAR in June), which translated into a 0.2% decline in sales at motor vehicles and parts dealers. Motor vehicles and parts sales fell 0.3% in June. 

* Excluding motor vehicle sales, demand increased 0.1% in July after increasing an unrevised 0.4% in June, while the consensus expected an increase of 0.3% 

* Business Inventories increased 0.4% in June after increasing an unrevised 0.5% in May, which was in line with the consensus.  * The weekly MBA Mortgage Index fell 2.7% to follow last week's 1.6% increase 

Tomorrow, weekly initial claims (consensus 305K) and export/import prices for July will be reported at 8:30 ET.

* S&P 500 +5.3% YTD  * Nasdaq Composite +6.2% YTD  * Dow Jones Industrial Average +0.5% YTD  * Russell 2000 -1.9% YTD

Pershing Square’s Ackman touts performance ahead of IPO

Bill Ackman is touting his 10-year track record as a corporate cage rattler while defending two of his more controversial activist plays as he gears up for an IPO later this year. Since launching Pershing Square in 2001, Ackman said his funds have an annualized rate of return to investors of 21 percent — one of the top hedge fund performances — compared with 8 percent for the benchmark S&P 500. Ackman cited his performance in his second quarter letter to investors, in which he also made reference to the upcoming IPO of one of his funds, saying it would happen "later this year." The overseas vehicle would give Ackman more capital — he wants to raise at least $4 billion — that can’t be withdrawn by investors during difficult times, as happened over the past year. Ackman also took the opportunity in the letter released Wednesday to defend his bruising battles with Herbalife and Allergan. Ackman, who has called Herbalife a pyramid scheme, said he is prepared to extend his $1 billion short bet against the nutritional products company — in the form of put options that expire next year — if necessary. The activist argued that not only is Herbalife’s business "deteriorating," but there is "much greater risk of regulatory shutdown or reform along with further stock price declines," according to the letter. Ackman also acknowledged his recent Herbalife presentation flop, saying "in light of the hype, investors and the media came to the event perhaps expecting recordings of the CEO acknowledging that he had been running a pyramid scheme." In a bid to put a positive spin on it, Ackman now claims the dense, three-hour presentation was "designed for regulators," and went on to remake his case against Herbalife’s nutrition clubs. "As a result of our investigation, we are now able to explain and document to regulators that what Herbalife management has deemed ‘daily consumption’ at nutrition clubs, is in fact a low- income, pyramid scheme concealed within the larger pyramid scheme," he wrote. The investor also circled back to his latest skirmish with Allergan. The maker of Botox sued Ackman for securities fraud after he teamed with rival drug company Valeant on a takeover bid for Allergan. "Unfortunately, in America, one can be sued by anyone for anything," Ackman wrote. "With respect to the law, you should know that we and Valeant are well-versed in the takeover and tender offer rules," he added. "We have been meticulously careful in how we have constructed and implemented this investment and transaction." Pershing Square is in the process of lining up enough shareholders to call for a special meeting to oust most of the board of directors, which Allergan has opposed. "Based on their scorched-earth attempts to stop or delay the meeting, Allergan’s management and board appear to already know that their shareholders do not support them," he wrote.