Although the sniping between Democrats and Republicans raged last week, it didn’t seem to hurt the market – the Dow Jones industrial average topped 15,000 again. Investors understand the dire impact of the impasse, but many believe the odds of the first U.S. debt default are still slim.
News that President Barack Obama appointed Janet Yellen to succeed Federal Reserve Chairman Ben Bernanke apparently softened the impact of the turmoil on Wall Street, as she is expected to continue Bernanke’s easy-money policies.
This week, political antics in the nation’s capital will not determine the course of the market – corporate earnings will. Thirty-one companies on the S&P 500 index are scheduled to declare their third-quarter earnings early in the week, so look for volatility in market prices. Stocks tend to be most volatile around earnings season, when a good or bad report can make or break a stock.
Two Town Crier “50” stocks made headlines last week.
• NetApp Inc. (NTAP; $41.81) remains optimistic that it will put in a strong performance in 2014, largely because of its multipronged cloud strategy.
The Sunnyvale-based firm engages in design, manufacture and marketing of networked storage solutions.
NetApp continues to forge a deeper relationship with Oracle Corp. to help organizations move their business-critical applications to private and public clouds, allowing them to “take full advantage of the agility, scalability and efficiency that the cloud enables,” according to a NetApp press release.
In a recent move, Cisco Systems Inc. acquired NetApp rival WHIPTAIL, which could eliminate a Cisco move to purchase NetApp. The move has led several analysts to downgrade NetApp’s stock to neutral or underperform, as it now faces competitive challenges in coming months. The mean target price is $45, with a high of $53.
• Marvell Technology Group Ltd. (MRVL; $11.43) designs, develops and markets analog, mixed-signal processing for mobile and wireless products and provides a range of integrated data storage products, including hard-disk-drive products.
While the chipmaker has made some questionable decisions, including pursuing markets in areas like Chinese mobile and wireless, now is not the time for investors to abandon the stock, according to an analyst at TheStreet.com.
The bad news: Marvell has been mired in litigation since 2009, when Carnegie Mellon University charged that Marvell had intentionally infringed on its patents for hard-disk drives. Marvell lost the case and was ordered to pay $1.17 billion in damages. Marvell appealed the verdict and requested a new trial, which a judge last month denied. There is uncertainty here, and Wall Street hates uncertainty.
The good news: Google Inc. recently introduced Google Chromecast, which plugs into a TV and allows streaming content via Wi-Fi. Chromecast is powered by a Marvell component.
The most recent upgrade and downgrade history deems Marvell stock a hold or outperform, with several analysts recommending neutral. The mean target price is $13.31, with a high of $17.